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in 2 Sections
ESTABLISHED 1839
Final Edition
-
Section 1
Reg. U. S. Pat. Office
New
Number 4582
165 *
Volume
Middle East Oil
I
By HENDRIK De
Sea,"
of Colonies,"
"History
and
J-7
etc. 7/
Great Powers for Middle
of
end
Sees
fields.
of
East oil
rivalry
and
cooperation of British and
'
American interests and demand of
French for par¬
%
has
prices have
given rise to
obtaining Near
■; East
oil
re¬
t
British economist asserts current crisis
;
phrase "priced
^7/77
conferences.
Treaty
nation's future,
met.;7' The
Hendrik De Leeuw
out of the mar¬
ket"
is
being
picture
oil
The
greatly
is
short¬
j:
-
pending which there should be "austerilizing" of expenditures, ces¬
speculation in capital values, and rise in interest rate.
.
Once
~
again, the old argument used-
>
latter for a 1
bullish postwar stock market has
LONDON—The economic crisis in which Britain now finds her¬ been
resurrected
the - alleged ,
self (it can hardly as yet be said through which she is passing) is of
broad ' domestic 7 and world-wide . I
threefold origin.
There is the fac- v
1
"demand"
for
/'everything
the
tor of historical change (in evi¬ each, also, there is a shading away
United States can produce," espe¬
dence, more or less, since the turn to a variety of minor but not un¬
rates and price relationships are
cially durable goods.
The Bull
of the century), the impact of two important matters having a bear¬
Market
Economists
have
con¬
against Russian oil interests* a significantly altered in short pe¬
It is
wars, chiefly the most recent one, ing upon the national life.
structed, a formidable statistical
struggle in which no holds are riods of time, the flow of re¬
the existence of this condition of
and, finally, the Socialist policy of
base for
this "demand."
In so
barred.
"
sources
must be affected. Simi¬ the present administration. Under affairs which makes the crisis in
Britain today at once simple and doing, in our view, their failure
i Clashing in Iran, Saudi Arabia larly, large price increases cut the each of these headings is to be
(Continued on page 35)
found outstanding features, but in complex, capable of prophecy as
and other Near Eastern vital oil
purch;\sing power of those groups
to the broad and imminent outspots, the issue has been diverted
(Continued on page 33)
continued on page 24)
{Mr, Ripley, ivho is the author
f,£v
(Continued on page 32)
of "A Short History of Invest¬
Pictures taken at 11th annual
♦Address by Dr. Backman be¬
ment," is well known to the City
dinner of the Cleveland Security
sation of
as
a
chief prop by the
,
,
.
.
and of deluding public concerning economic
Asserts Socialists' failures are prompting its falling back on
very principles of individualism which they have been discrediting.
Concludes fundamental cure can come only through political change,
ages.
'
in the world encountered
Jules BackmaO'
different from more fre•••••/"-'.7,',.■"v
what it was 40 years ago, Today
IS
quently. Considerable concern
British, Dutch and American
algo expressed over the sharp
oil interests smooth the gears of
changes which are taking place in
their intermeshed operations with
price relationships and in pricethe most -select lubricants. The income
relationships.
'
picture today is of those British,
When prices rise at different
Dutch and American oil combines
l :',
•'"today
originated in (1) historical
change; (2) impact of two wars; and (3) most importantly, pres¬
ent Socialist administration.
Accuses government of mortgaging
strong
buyers' resist¬
ance
is being
n
Moscow
the
it
con-
siderationi
|
By PERCY RIPLEY
products
is reported
that,
be-a
for
..
some
Holds
this will
matter
••7- ■
<s>
Origin and Nature
For
concern.
sources.
Its
considerable
on
Economist's"
economics is attempted.
examining the "Bull Market
this essay in empirical
Britain's Economic Dilemma—
n-
in
creases
her
against
It is with the view of
13%.
7 i
These
conspiracy
-
present position that
risen
about
doas a
and is bent
:
employment
beginning of 1946, the wholesale price index has in¬
creased by more than one-third, while the consumers' price index
regards Anglooperation
threatening production and
Since the
tends Russia
American
prices; record production in
•
ticipation. Con-
,
durables at present i
face of decreasing effective demand •;
portends inventory accumulation;: and vacuum between real demand .
and present consumption level is being concealed. Concludes there
will be general price collapse with unemployment and general defla- •
tionary spiral, with initial drop of DJ Ind. Stock Avg. to 120-130.
income to purchase
have insufficient savings or
or
v
supporting argument that (
large demand for goods, on which expectation^fnr=?e«^m^buIli j
market are based, is non-existant. Maintain 85% of individuals ?
unwarranted the blame for price roes
businessmen, since they are.not
to
j
J. QUINN
Market economists adduce detailed data
Economics,. New York University
ascribed
responsible for the contributing
factors of food price increases, higher freight rates, credit inflation,
foreign relief policies.
Concludes government policy,* not in- 7
dustry's price administration, is responsible for current high price
level. Expects lower prices later in year, whose extent will be de¬
termined by government action in supporting farm prices which are
Dr. Backman terms
-
Dutch economist reviews rivalry
closer
Associate Professor of
the Java
Author of "Crossroads of
Stock Market
By G. A. HAAS and J.
JULES BACKMAN*
By DR.
,
LEEUW
Copy
"Demand Performance" and
Responsible for
High Prices
Government
Straggle for
Price 30 Cents a
York, N. Y., Thursday, April 3, 1947
Marketing As¬
fore the American
sociation, New York City,
7, 1947.
Vacuum Concrete
March
writer
of London as a
and
on
finance
economics.—Editor.]
Traders
Association
State and
on
appear
30 and 31.
pages
Municipal
Aerovox Corp.
Havana Litho. Co.*
:
R. H. Johnson & Co.
STATE
Established 1927
*
AND
MUNICIPAL
BONDS
Prospectus ori request
Bonds
W
INVESTMENT SECURITIES
Bond Department
Hirsch & Co.
Members
New
and
64 Wall
York Stock Exchange
BOSTON
other Exchanges
25 Broad St., New
York 4, N. Y.
Cleveland
Chicago
...
Geneva
..
Teletype NY 1-210
2-0600
of INDIA, LIMITED
to
the Government in
■;
Syracuse
;y ',
New
OF NEW YORK
Harrisburg
Dallas
HART SMITH & CO.
52
LAMBORN & CO.
99 WALL
*Air
York
Products, Inc. Com. & "A"
2-0980
OF
•V\ X
in India, Burma, Ceylon, Kenya
Colony and Aden and Zanzibar
mmmmmmmmm
THE
Missouri
Utilities Co;
-
\
$2.40 Conv.
-
for Banks,
Preferred
CITY OF NEW YORK
Toronto
Service
Common & Preferred
Raytheon Manufacturing Co.
Office: 26, Bishopsgate,
London, E. C.
NATIONAL BANK
Bond Brokerage
*Emery Air Freight Corp.
STREET
Montreal
THE CHASE
;:
Security Dealers Assn.
Y.
HAnover
I Bell Teletype NY 1-395
New York
NY 1-708
;7'777
WILLIAM ST., N.
Scranton
Bond Dept. Teletype:
:v'\77 Members
NEW YORK 5, N. Y.
Kenya Colony and Uganda
Head
Buffalo ~
THE NATIONAL CITY BANK
(Representative)-
NATIONAL BANK
Bankers
PHILADELPHIA
Wilkes-Barre
IVilliamsport Springfield Woonsocket
Pittsburgh
London
,
Albany
Troy
Baltimore
HAnover
Street, New York 5
Brokers
COMMON
|
Analysis upon request
and Dealers
Branches
Subscribed Capital
Paid-Up
Reserve
The
.
Capital
Fund
0Prospectus on request
Hardy & Co.
£4,000,000
Exports—Imports—Futures
£2,000,000
£2,200,000
Bank
conducts every
description
banking and exchange business
Trusteeships and Executorships
also undertaken
SUGAR
Reynolds & Co.
.
Members
of
120
New
York
Broadway, New
Telephone:
DIgby 4-2727
^
■
Stock Exchange
York 5, N. Y.
REctor 2-8600
J; Be» Teletype: NY 1-639
Members
Members
New
New
30 Broad
Tel. DIgby
York Stock Exchange
York Curb Exchange
New York 4
St.
4-7800
-»
Tele. NY 1-733
irahaupt&co.
York Stock Exchange
Principal Exchanges
Members New
and
111
REctor
other
Broadway,
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Teletype NY 1-2708
2
(1782)'
THE COMMERCIAL & FINANCIAL
CHRONICLE
Thursday, April
3, 19435
"
Trading Market$ int
'
-
Maintaining Prosperity—Roles of
Management and Government
Old Reorg. Rails
Commons
&
Preferred#
Expreso Aereo
Vice-Chairman, Council of
Lear, Inc.
SECURITIES CORP.
Established 1920
,
Z
■'
.
Members N. Y. Security Dealers Assn.
Nat'l Ass'n of Securities Dealers, Inc.
Exchange PI., N, Y. 5
BELL
TELETYPE
prosperity rests
our
HA 2-2772
NY
Economic Advisers to the President
Although assigning to management first responsibility for health and advancement of our
economy,
Mr. Keyserling stresses vital role of
government.
Holds proper proportion of priva'e
enterprise and
public action will safeguard prosperity, and scores "fatalistic pessimism" of
long-tsrm economic out¬
look. Says another major depression in U. S. would
bring end of free
KING & KING
on
proper
I have been asked to
1-423
balanced price and
speak
wage
policies.
Government Roles,".,,
"
Whoever phrased this topic has
my appreciation
.
—for referring
Elk Horn Coal Com. & Pfd.
to
Intl. Acc. Society A
the
role
Jones Estate Corp.
role
May, McEwen & Kaiser
of
that for
120
Exchange
Broadway, N. Y. 5
we
Savoy Plaza
of
Leon H.
our
Keyserling
Vanderhoef & Robinson
Exchange
31 Nassau Street, New York 5
ernment's
.
role
in
maintaining
prosperity has been included in
topic for discussion. This in¬
the
clusion
does
not
rest
upon
any
i
k
i
/ )
H. G. BRUNS & CO.
Telephone: WHitehall 3-1223'
American Overseas
Teletype NY 1-1843
tives
of
—
Sold
—
Boston & Maine R. R.
Issues
120
York Stock
York
Exchange
Curb Exchange
BROADWAY, NEW
Tel.
REctor
YORK 5
2-7815
Northern New England Co.
Southeastern Corp.
tive.
In
to
not
term
Trading Markets
St,
1127
.
on
may
WALL
*An address by Dr. Jacoby be¬
fore the Cleveland Security Trad¬
and
un¬
derlying factors of growth and
pansion
in
Association, Cleveland, Ohio, years).
The
boom
ness
the
long-term
evidence of
lies
all
Securities
MICHAEL HEANEY, Mgr.
busi¬
about
KANE, Asst. Mgn,
Joseph McManus & Co.
Members New
York Curb Exchange
Chicago Stock Exchange
ex¬
(3-6
a
WALTER
39
Broadway
New York 6
Digby 4-3122
us.
Teletype NY
pro¬
is
1941—the
greater
last
than
that
of
prewar year—by about 25%. Un¬
employment is less than 2,500,000
Kingwood Oil Co.
and most areas of the nation have
of vacant jobs over jobseekers.
The prices of nearly all
commodities continue to rise un¬
der
the
pressure
demands
over
of
an
available
excess
A
Crude
Oil Producer
Price about 1%
of
supplies.
••••
■
■
.
Income
profits
levels.
1-672
and
payments
business
Analysis
running at unparalleled
Ten years ago the present
are
economic
1-1610
record-breaking
an excess
Teletype NY
5
the
dition of boom,
containing impor¬
tant elements of
instability in the
years)
Exchange
NEW YORK
HAnover 2-9470
Curb and Unlisted
condition
of
tlje
I believe we
properly describe it is a con¬
(1-2
1923
Curb
one
contemporary
short-term
York
Teletype NY 1-1140
American economy?
can
New
ST.
easy
characterize
we
Established
,'
Members
64
bankruptcy courts.
situation
would
on
page
-
•
■
&:$:
'
Request
on
4;
*
•
yy-•
have
been' described as a close
approxi¬
mation to Utopia.
The
contemporary boom
is
(Continued
;•
•
••
PETER MORGAN & CO.
31 Nassau Street
New York 5, N. Y.
Tel. BA 7-5161
Tele. NY 1-2078
20)
-
Cement
Girdler
Grinnell
Marmon-Herrington
Standard Stoker
^Tennessee Gas & Transmission
available to
banks only
G.A.Saxton&Co.. Inc
.
Jacoby
Goodbody & Co.
1
Giddings & Lewis
i
H.
Members N. Y. Stock
Exchange and Other Principal Exchanges
115 BROADWAY
NEW YORK 6, N. Y.
in
Dictaphone
General Portland
Y. 5
Neil
fact, with due regard to the large
American-La France
70 PINE ST., N.
I
imply that
Telephone BArclay 7-0100
,
How
CANADIAN UTILITIES
/
Frank C. Masterson & Co.
dead."
de¬
Canadian Securities Dept.
Hanover 2-4850
1-1126
!-*~
"In
the longer-term situation is be¬
yond analysis and prediction.
In
ers
Aspinook Corp.
The late Lord
Keynes remarked:
the long
run,
we
are
all
on
mean
business
a
in the
or
,
Commodore Hotel, Inc.
"than
assurance
Common Stock-'
Brook Water
probably be dis¬
more
put
can
street
CANADIAN MINES
St., N. Y. 5
Teletypes—NY
....
Scranton Spring
four
or
events, for the events of only
year
CANADIAN BANKS
(miCompcmu
'
managers must be concerned with
immediate
as
well
as
remote
con¬
-
can
with
duction
Members N. Y.
Security Dealers Assn.
Central States Elec.
(Va.)
|he nature and timing of more
immediate changes. But business
We Maintain Active Markets
in U. S. FUNDS for
Sxeeue,
dealers and
cerned
alterna¬
"
4-8120
System Teletype NY 1-1919
New York 4, N. Y.
forecasting,
three
scene
Aggregate physical volume of
/
Broadway WHitehall
Bell
can
attempt to
weigh
the
each
hence
years
policy
CANADIAN INDUSTRIALS
Special
50
1
the economic
March 28, 1947.
United Piece Dye Works
Members New York Stock
Exchange
Members New York Curb
Exchange
business
a
hazards in all business
the natiori and
do
McDonnells To.
Follansbee Steel 4%s-66
*Prospectus
<•>
confront
short
Quoted
Edward A. Purcell & Co.
foreign loan policy.
eco¬
velopments,
Bought
New
v
too generous
attention
to
certain
economic
Members
37 Wall
Ralston Steel Car
Consolidated Elec. & Gas Pfd.
discuss the economic outlook
during the year ahead.
I shall
try to state the most probable prospects for
business, direct
centrating
New
Bell
a
consequenc e s
of
/adopting
20 Pine Street, New York 5
Com. & Pfd.
"B"
Mid Continent Airlines
I propose to
nomic
Airlines
All
branch office*
our
Hoe
page 28)
are
and
cuts
that
Douglas Shoe
Westchester Service Corp.
:/ 4s, 1953 Z'-'ZZZ^'ZZ
Bell
NY 1-1557
La.-Birmingham, Ala.
Southwest Natural Gas
unsettled, and together with chaos and economic crises
factors making for short-term economic
stability. Sees
need for balanced Federal
budget and readjustment of present
distorted price structure. Questions
advisability of excessive tax
Society for the Advancement of
Management! Los Angeles,/Calif.,
March 21, 1947.
Ry.
Preferred <
on
Exchange
however, labor sit¬
major alterna¬
by Mr. Keyserling
Struthers Wells/
&
(Continued
uation is
abroad,
before National Conference of the
Common
would
growth and expansion, Dr. Jacoby expresses belief
depression within next year is not likely. Holds,
candor, I must
appreciation that the gov¬
*An address
Common Stock
of
imma¬
inconsequential
or
Stock
that
say
is
underlying factors of
with equal
Telephone COrtlandt 7-4070
■/' Bell System Teletype NY 1-1548
L.
terial
role
Characterizing present situation as a boom containing important
elements of short-term
instability, but with
share.
But
W.
government's
University of Chicago
whelming majority of the Ameri¬
people.
This
viewpoint
I
express
-
the
York
Direct wire* to
By NEIL II. JACOBY*
Vice-President and Professor of
Finance,
advance¬
can
Class "A"
4s, 1948
actions
condition
Any person who would
Request Z
Pathe Ind.
to
any
combination of govern¬
mental programs.
I know this to
be the viewpoint
of the over¬
3/68,1956
1st
composite
vitally
on
St., New York 4, N. Y.
New Orleans,
re-
free system of
business enterprise—and not shift
Savoy Plaza
Danville
re¬
do
■
0%f;-Vr
HAnover 2-0700
sincerity
health of the whole
economy.
i,ne
New
25 Broad
Present Economic
see
.
Atlantic &
Every
government
see
Members
n s
economy will
remain with our
Curb
the
long
as
can
ment
York
open.
must
.!i1. ■'-jZ.v-
Steiner, Rouse & Co.
and
as-
for the health
Teletype NY 1-1227
New
are
all
ditions
f irst
e
and
Members
eyes
into the future
t h
which
.'
Analysis
■
■
'
•
sponsibility
WOrth 2-4230
Bell
whose
sec¬
hopes and
p i r a t i o
Mitchell & Company
facts
earnest
your
as
hard
join in
I
ond.
and I say this in all
*—
political viewpoint or
dogma.
It rests upon
flective businessman is profound¬
ly aware that under modern con¬
ernment
Sweets Steel
Members Baltimore Stock
economic
gov¬
-
■
particular
management
first and the
Prosperity—Management
.
<e>
of
.
Rockwell
Bought—Sold—Quoted
'v-.
enterprise, and contends future of
Explains Employment Act of 1946.
the topic "Maintaining
on
;
Manufacturing Co.
By LEON II. KEYSERLING*
Soya Corp.
40
z
WHitehall 4-4970
Teletype NY 1-609
Circulars Available
on
Acme Aluminum Alloys, Inc.
NORTHERN INDIANA
Conv.
Z
FINCH TELECOMMUNICATIONS
PUBLIC SERVICE
'•
NATIONAL PAPER & TYPE
POLAROID
V
Common
90c
MONROE AUTO EQUIPMENT
/ 74 Trinity Place, New York
6, N. Y.
Telephone HAnover 2-2400 Z
5
Z
Teletype 1-376-377-378
Private Wires to
Buffalo—Cleveland—•Detroit—Pittsburgh—St^^uls^^
"
/
<'
Company
Conv. Preferred
♦Twin Coach
BOUGHT—SOLD—QUOTED
Member New York
Security Dealers Association
,
*'•!Ti.tA
Solar Aircraft
CORPORATION
Troster, Currie & Summers
Preferred
>. zz
Detroit Harvester Co. Com.
vZ
Company
Conv. Preferred
•Prospectus
on
request
>
'
J-G -White & Company
INCORPORATED
37 WALL STREET
f
NEW YORK 5
ESTABLISHED 1890
Reynolds & Co.
Members New York Stock
120
Exchange
Broadway, New York 5, N. Y.
Telephone:
Tel. HAnover 2-9300
Tele. NY 1-1815
-
Bell
REctor
2-8600
Teletype: NY 1-635
V,
iVolume 165
Number 4582
THE COMMERCIAL & FINANCIAL
CHRONICLE
I N DEX
Articles
and
"Demand Performance" and the
—Messrs. G. A.
Government
—Dr.
Haas
and
Responsible
Jules
J. J.
for
News
Stock
Business Prospects in 1947
Page
/
Cover
Prices
Backman
—Percy Ripley
Cover
Keyserling
H.
Jacoby
3
4
World Bank in the Spotlight—Herbert M. Bratter
5
volume
The Labor Government's Failures—Winston Churchill
7
profits
Management Problems in 1947—Edwin E.
Federal
Government Must
Relinquish
Control—Rep. James C.
In
Consumer
recent
business
months
record,
on
have
we
the
seen
Credit
Looking Ahead in Casualty Insurance—Benjamin Rush, Jr.
the majority
satisfac¬
servers
for
been
the
have"
most
businesses.
A
good
in
of the
the
recession
a
widely
will
advertised
has occurred, f,
In view of the
many
it
be
ness
predictions
con¬
we
are
Today's Shaky Real Estate Market—Elliott V. Bell
14
Should Have No Fear of National Debt—Abba P. Lerner
15
too
16
true
16
good many
others can see
*
SEC
Abandons
,
Disclosure
Buyers
*
*
of Promulgating
(Editorial)
Basis,
only
for
3
the
better
and
4
prices
The
Purchasing
Committee
newspapers
if
SEC Reverses NASD Ruling in
Herrick, Waddell Case
5
Recommends Revision of Securities Acts
have
do
we
basic
£t
Requirements to
Unlisted
Corporations
Let
McDonald
Is
New
SEC
ference,
6
Member
gotten
high.
tion
that
us
Reserve
Bank-Loan
Board
Bill
Clarifies Reasons for Backing
1947
of
goods
i8
Government
Europe
Sees
Named
In
fifth
1946,
Danger in Price
*
19
-
42
52
Conference
i
and
Insurance
Man's
■Canadian
•
20
Investment
Recommendations
Einzig—Britain's Trade Policy
Dilemma
Mutual
NSTA
7
Funds
10
Notes
15
Observations—A.
Wilired
60
chase
Reporter's Report
Prospective Security Offerings...
Public
Our Reporter on Governments...
18
to
i;
1
,;v
a
our
on page
fac-
Quotations Upon Request
25)
--'V
vw-.\
.
b
FARR &
Members
no
power to
or
York
New
York
58
Utility Securities
mating
8
Securities
14
a
the
consum-|
transaction.
24
Securities Now in Registration..
Tomorrow's Markets ) Walter
under either Section
15C1,
53
ities
or any
;
Thiokol Corp.
Billings & Spencer
National Company
Cramptori Mfg. Co.
Hi M O is
(Continued
5
to.
&
Members New York Security Dealers Assn.
WOrth 2-0300
System
Teletype
NY
1-84
authority
other Section of the Secur¬
Exchange Act of 1934, to adopt
a
52
You
TRADING MARKETS
Bell
no
Member
Exchange
ST., NEW YORK
170 Broadway
Simultaneously, the SEC ruled "it has
Exchange
Sugar
ascer¬
as
16
Estate Securities
Securities Salesman's Corner
WALL
&
Assoc.
TEL. HANOVER 2-9612
j
compelled every dealer making a pur¬
sale in the over-the-counter market to disclose to his
wholesale price in other lines of business) before
Cojfee
CO.
Stock
Exch.
i
Exchange Commission has decided
be construed
Curb
!
subject
independent bid-and-asked price
York
New
New
disclosure rule.
tainable (in other words what would
59
Real
Washington and
Haytian Corp.
one-
1941.
adopt the so-called bid-and-asked "disclosure" rule
customers the best
Pa<*e
Whyte Says)
Mav...
The Securities and
.
•
Railroad
10
.'
in
which would have
Our
5.9
Securities
Dealer-Broker
/
Stocks
Bookshelf
municipal transactions to such
60
Distortions
Page
Business
•.
Punta Alegre Sugar
previous
made
Maine, Since the production of
bansacUon._Commission also admits it had
not
Regular Features
Bank
a
60
.....
Yugoslavia Pays Its World Bank Quota
i
the
record
/independent bid-and-asked price ascertainable before consummating
Outstanding "Hoosier"
Geneva
produced
we
than
more
peacetime
"Chronicle" fought
against enactment of proposal since 1942.
Would have compelled every dealer to disclose to customers best
Sterling
Security Dealers Will Close Saturdays
the
and
New York Security Dealers Assn.
Nat'l Ass'n of Securities Dealers, Inc.
exH
-Asked! Disclosure Rule i
17
Italy Joins Int'l Fund and the World Bank
Schram
services
and
(Continued
16
Bond Club of N. Y. Announces Plans for 1947
Field Day
Fmil
we
by far the production of
other peacetime year on rec¬
any
probably
Spring,
15
Rep. Smith Questions Gold Buying Policy
Teletype NY 1-1203
f
120
£
India Finance Official Opposes
Scaling Down of
Balances
^
Broadway, New York, N. Y.
HAnover 2-8970
Member of
SEC Abandons Idea oi Promulgating
13
goldwater & frank
39
ceeded
kind
some
,
Richmond NASD Dealers Sponsor
Meeting
Mortgage Certificates
Where We Stand Now
March 25, 1947.
13
Misnomer
a
Company
We have just completed a year
in which the value of total
producr
11
Says "Over-the-Counter" Market Is
Federal
where
8
Chicago Brokers Favor Five-Day Week
all
stand at the moment.
costs
so
inform
in
Poland
some
under¬
we
consider
Title
times
should
we
before
us
first
us
ord.
6
Inflation Control by Moral Suasion
recession
which
have before
*An address by Mr. Whittemore
before the Bankers' Study Con¬
Caffrey to Push for Extension of Disclosure and Proxy
troubled
take to determine what lies ahead.
6
of
facts
change
a
because
have
not
of
All
downward
Bid-and-Asked
Reports
good to be
and
misgivings about
ahead, I have had assembled
in any change
L. F. Whittemore
Idea
Rule
"Hand-to-Mouth"
on
Agents
*
enjoying
Offerings Wanted
that
one
the future expressed by so many
businessmen and the widespread
■
YORK
WHitehall 4-6551
the
sider the high
level of busi¬
Mediation Board Fails to Settle Dispute Between UFE and
A. M. Kidder & Co.—Edmour Germain
WALL STREET, NEW
Telephone:
do
13
Policies—Louis Budenz
dogs
generation!
have
we
Industrial Price and Production Policies Need Revision
—Solomon Barkin
Soviet
and
cats
a
people
now
second
99
11
Indictment of
buying
that we're down to the
long
so
business ob¬
country will
proved wrong and if
majority
9
i
Labor and Wage Prospects in
1947—Roger Babson
An
been
ofo
more
of
9
for
amazingly low level of unemployment, and
an
than
8
Davis
We've
highest peacetime level of
tory
Witte
AND PUPS
excessive
Growing Importance of Durable Consumer Goods in Our
Economy—S. Morris Livingston
Labor
KITTENS
inventory accumulation and concludes we
rapidly approaching balanced condition in which competition
among both buyers and sellers exists.
Says political trend favoring private enterprise is good omen.
2
Business Prospects in 1947—Lawrence F. Whittemore
no
WE BUY
are
2
-—
Present Economic Problems and
Prospects—Neil
Sees
ment.
Maintaining Prosperity-Roles of Management and
H.
AND COMPANY
on "the most widely advertised
recession," Federal
Reserve executive refutes
theory that falling prices entail decline
in business
activity. Holds prices of both agricultural and manu¬
factured products are out of
line, and looks for healthy readjust¬
„_Cover
Government—Leon
Reserve Bank, Boston
Commenting
__Cover
Britain's Economic Dilemma—Its Origin and Nature
Struggle for Middle East Oil—Hendrik De Leeuw
President, Federal
w
3
LicHTEiMfin
"
By LAWRENCE F. WIIITTEMORE *
Market
Quinn
High
(1783)
rule requiring general
Punta
58)
on page
Haytian Corporation
;
Alegre Sugar
Eastern Sugar Assoc.
Published Twice Weekly
Copyright
The COMMERCIAL and
Reentered
FINANCIAL CHRONICLE
Reg.
PPILLIAM
B.
U.
Patent Office
S.
Park Place,
25
York,
Publishers
COMPANY,
DANA
New York 8, N. Y.
REctor 2-9570 to 9576
Publisher
President
WILLIAM D. RIGGS, Business Manager
IERBERT D. SEIBERT, Editor &
WILLIAM DANA SEIBERT,
Thursday,
April
N.
Thursday (general news and ad'ertising. issue) and every Monday (com¬
pete statistical issue — market quotation
tate
and
Other
city news,
news,
etc.).
135
Offices:
clearings,
bank
S.
Y.,
Salle
at
St.,
111.
(Telephone: State 0613);
if Drapers' Gardens, London, E. C., Engmd, c/o Edwards & Smith.
:hicago.3,
the
under
the
Lea Fabrics
matter Februr
post
office
Act
at
of
We
interested in
are
...
March
High Grade Public Utility and Industrial
Subscription Rates
Subscriptions in United States. U.
Possessions, Territories and Members
Si
Pan-American
Union,
in
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of
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per
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per
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rate
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of
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extra.)
the fluctuations
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Tel.:
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Members
Exchange
Street, New York 4
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York
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Exchange
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25 Broad St., New York 4, N. Y.
Tel.; Andover 4690
in
of
exchange, remittances for for¬
eign subscriptions and advertisements must
Private
Worcester
FIRM MARKETS
AIR PRODUCTS, INC.
/
Bond & Mtge. Guar. Co.
Bagdad Copper Corp.
Common and Class A
Lawyers Mortgage Co.
Lawyers Title & Guar. Co.
Globe Oil & Gas Corp.
Textile, Inc.
& Trust Co.
Prospectus
Stock
James H. Acker & Co.
Members N. Y.
Exchange
25
15 Broad St, N.Y. S
WHitehall 4-6330
Bell Teletype NY 1-2033
request.
*lst
"
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Street
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—
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quarter analysis on request
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on
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request
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Boston
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to
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MAINTAINED;
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be made in New York funds.
CERTIFICATES
->
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Record — Monthly,
year.
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year.
year.
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Class A Common Stock
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of
Other Publications
TITLE COMPANY
Ir
offerings of
New
3, 1879.
$25.00
La
second-class
as
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Every
ecords, (Corporation
by William B. Dana
Company
Other Countries,
1947
3,
25.
iry
1947
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;;;
NEW
YORK
YORK
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EXCHANGE
EXCHANGE
(Associate)
•
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Members
N.
Y.
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York 6, N.Y.
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j!
j
Thursday, April 3, 1947
FINANCIAL CHRONICLE
THE COMMERCIAL &
4
(1784)
BUSINESS BUZZ
Growing Importance of Durable
Consumer Goods in Our Economy
By S. MORRIS
Chief, National
,,
.
Abitibi Power
'
':V
official expects
Commerce Department
•/,'
^
deferred demand
enormous
boom, and nation's sharply growing productive capacity to reach
$250 billion by 1950. Predicts national output double the 1920's
average,: in
which . consumers could correspondingly increase j
durable goods purchases. Foresees ultimate problem of maintain- j
have been j
important!
ing high consumption level after more obvious needs
satisfied, at which time consumer credit use will be
| Armstrong Rubber
Aspinook Corp.*
Barcalo Mfg.*
:
Bates Mfg.:
element.
consumers'j durable
t.-
size and importance of the postwar market
with the fact that this
Any appraisal of the
for
'
■
goods should1, start
country is still
Cinecolor
growing. That
growth
is
compounded
of the gradual
>,
Pfd.
*
*
'
Chicago R. I. & Pac.
Old
LIVINGSTON* '
Economics Division, U. S. Department of Commerce
-
•increase in
Gen'I Dry Batteryt
General Machinery
working
American
*the
'
Gt. Amer. Industries
pop¬
plus
ulation
genius:far
ficult because the decade before
the
war
profoundly affected
was
by the worst depression this coun¬
try has experienced. In the last
period of sustained prosperity-4from
1923
national
1929—the
to
output and income
were
roughly
the
half of what is possible over
next several years.
*
•
improving
the
was
Michigan Chemical
Pfd.
Pfd.
growth in population is still
adding
almost half
a
million
The
per year.
Further post¬
readjustments—including the
elimination of production bottle¬
necks, the modernization of pro¬
workers
facilities
ductive
management-labor
of
much
own
afford to
could
consumers
if incomes
over
the next
sev¬
a
commensurate with
high level of production. Such
a
calculation would
increased
productive capacity is sig¬
not only because of the
the
and
serve
to in¬
the source, the magnitude
dicate
significance
of
the
ac¬
It would also
highlight ultimate problems of
maintaining a high national out¬
put when that backlog of de¬
•
goods which need to be sold but
also because of the incomes to
be earned at
a
Upson Corp.*
duction.
The
high level of pro¬
task of visualizing
the problems
Air
Conditioning
U. S. Fidelity & Guar.
that
and potentialities of
capacity is made more dif-
Automobiles
Example
an
as
in spite of
Unfortunately, and
the
excellent
Cox
"Control
before
United Artists*
of
Consumer
many
work
Professor
of
University of
vania, March 26, 1947.
School,
Vacuum Concrete *
Warner & Swasey
use
an
the au¬
example
ac¬
the total.
'
of
-
cars
during
any
year
admittedly
over-state the average number of
in use during the year. They
cars
nevertheless,
are,
a
convenient inr-
dex of
cars in use going back over
period of several decades. They
include, of course,
ness
use
as
well
for busipleasure.
cars
as
Two influences determined this
user
inventory in the
years
be-
Sold
who
comprise
the
on page
44)
-
Quoted
most
G.
Swan¬
ton, Director
o f
Purchases,
,
Repeating
A,rms Corp.,.
reports at the
with the
re¬
contin¬
ued
high vol¬
of indus¬
"In other
Robert
G.
Swanton
business
being
"Increased production
and short-
policies have reduced
the backlog of unscheduled orders
in a number of lines. Indications
term buying
production over the next
unless the interna¬
tional situation and labor
tions cause
Teletype NY 1-672
of
some
condi¬
interruptions and mal¬
adjustments. Of the two, the new
international problems are causing
are
level¬
prices
are
con¬
of in¬
flationary increases.
Inventories
"Extreme
Members /V. Y. Stock Exchange and Other Principal Exchanges
Telephone BArclay 7-0100
lines, prices
sidered to be the final stage
tions.
months
of heavy European
ing off with signs of breakdown
under buyers' resistance. Upward
flurries
maintained through
March, with fewer reporting de¬
clines
and a slight increase in
those reporting increased opera¬
is
advanced
Foodstuffs
news
requirements from American pro¬
duction.,
port:
"Pur¬
chasing agents
a
Commodity Prices
this month.
As¬
the
Says
sociation's
three
reomeet
,
~:"The general trend of prices has
been ending up but commodities
in critically short supply, such as
copper and lead, advanced sharply
eftd of March.
favor top
105 West Adams St., Chicago
». t
>
Win Chester
115
Broadway, New York
agents
concern.
Buyers are'watch¬
ing these developments closely for
they may affect the price; and
availability of many commodities.
of
find
Goodbody & Co.
Standard Gas Elec.
opinion of purchasing
which is Rob-;;
ert
"
-Total registration's of passenger
Stromberg-Carlson Com. & Pfd.
Bought
got for you,
Purchasing Agents, headed by Robert G. Swanton,
composite
chairman
largest single category,
for almost a third
counting
St iley (A. E.) Mfg. Ce.
Grinnell Corp.
Southwest Natural Gas
ttoon
A
the
Bird & SonPfaudier Company
Derby Gas & Elec.
Puget S'nd P. & L. Com.
I
eggs
Weegee!"
rxems, tne
Oxford Paper Com. & Pfd.
Bowser Com. & Pfd.
found the Easter
Business Survey Committee of the National Association of Purchasing
trial
Cent. States Elec. Com.
tProspectag Upon Requtrt
Committee of
if the problems and possibilities.
Automobiles. and equipment are
(Continued
Art Metal Construction
you
report short-term commitments by buyers now order of the day, and
extreme caution followed in management of inventories.
^
ume
Amer. Gas & Power
Tide Water Pwr. Com.
Pennsyl¬
see
Buyeis on "Hand-le-Mcnth" Basis
others, the data neces¬
for such a calculation in
instances are lacking. It is
possible, however, to
tomobile industry as
Credit" Conference, Wharton
United Drill & Tool "B"
I
Mr.
and
sary
a
*An address by Mr. Livingston
"Oh,
mand is exhausted.
nificant
■,
.
Circular
the
per
That
|ff Towmotorf. ''r'
or
accelerate
f
T aylor-Wharton*
,9Balletin
im¬
man-hour. By 1950
the nation's productive capacity
will be nearer $250 billion.
In
succeeding
years
the potential
output will be even larger..
output
Purolator Prod.*
Pfd.
the
and
normal tendency toward
Polaroid f >=
»S.
By
cumulated demand.
relations—should
Philip Carey
U
1929
pre-war
provement
Pathe Industries
A
goods would be to calculate how
in
war
Moxie.
N.Y. New Hav. & Hart
then-current
in
eral years are
the
Minn. & Ontario Paper
Missouri Pac.
Wts.
t
trend, the national
output is approaching $220 billion.
Mexican Gulf Sulphur
.;i:Jextroniffa ::jft
a
1941, in spite of five million un¬
employed, it was $180 billion. To¬
day, with relatively full employ¬
ment, but when productive effi¬
ciency has not yet caught up with
_Com._Pfd.
,tj
had
billion
$40
na¬
billion.
$140
than
less
inventory of
the hands of
depreciated value
prod¬
gross
tional
uct
Long Bell Lumber
Majestic Radio & TeL
Maryland Casualty
;
Livingston
S. Morris
of
the
1941
goods' in
prices. Orie way of evaluating thfe
importance of consumers' durable
.1947 prices,
Lanova*
Old
consumers
Converted to
-
Hydraulic Press
Old
durable
methods.
Hoving Corp.f.
the end of
production
Hoover Co.
:
Professor Cox estimates that at
continualily
Higgins Inc.
ment
in
in
caution
of inventories
the
reports.
manage¬
is noticeable
Many
are
main¬
taining supplies only to the extent
scheduled production.
of definitely
With commercial loans at a
high
mark, banks are reported insist¬
ing on liquidation of excess in¬
ventories held by some borrowers.
Some new unbalancing of stocks
(Continued
on
page
42)
CTIVE MARKETS
American Overseas Airlines
Ward & Co.
EST.
1926
•
Consolidated Dearborn
•:
Corporation
Members N.Y. Security Dealers Assn.
Y.
Seligman, Lubetkin & Co.
*
,<
Incorporated
ENTERPRISE PHONES
f
J.K.Ricc.Jr.&Co.
:|j
■
Darlf'd 6111
Buff. 6024
^
Boe.2100
Boughi—Sold—Quoted
Com. & Pfd.
Circular upon request
1-1286-1287-1288
Direct Wires To
Phlla., Chicago & Los Angeles
di-n0c co.
Kingan & Company ~
U. S. Finishing
120 BROADWAY, N.Y. 5
REctor 2-8700
N.
Tennessee Gas & Transmission
741
Broad
Members
New
York
Security
Street, New York 4
Dealers Associatibii
>*•*,.
'
-^t&
HAM^'2-tiOD8
I
Established 1908
Members N., Y.
I
Security Dealers Assn.
REctor 2-4500—120 Broadway
Teletype N. Y. 1-714
it. Bell Svsteny
;;
SIEGEL & CO.
39 Broadway, N.
.-.•••/'Vr
Y. 6
DIgby 4-2370
Teletype NY 1-1942
V
«
; J
^Volume 165
Number 4582
THE COMMERCIAL & FINANCIAL
CHRONICLE
(1785)
5
:/•
.c./'
Observations
on.
Behind-the-Scene Interpretations
'front the Nation's
Capital
vfll/x,-.
JlJlIl/\Mr
„
% A. WILFRED MAY=
JL Cr tv
WAGE-PRICE-PROFIT MISCONCEPTIONS STILL RAMPANT
PAPER
Mr. Lewis' renewed
demonstration of power, the wage disagree¬
ments in the
Biggest
out of
news
Washington in imminent weeks won't fea¬
ture tax reduction
or budget curtailment but is to deal rather
with
Taxes and the budget are good for political
bushwhacking.
There'll be no agreement between White House and
Congress on how
far to depress tax rates or how much to shrink
the budget.
But
prices.
for
an
ascending effort by the Executive and Legislative
ends of government together to •»
press down, prices in general. ;•
business must charge the public
v
industries, and the General Motors
dispute, are reincarnating to ah even more extreme degree previous
fallacies and fantasies on the issue of
wages. And this is particularly
*.
.
..
i
*
.:..
.
•
less
C6ngressional leaders of both
major parties
for
goods
must
most
be
kinds
lowered.
production boom and
abnormally fullemployment condition are ended. For the out-
That
this issue, and
on
interests
current will look in vain for the
political
refuge
usually
avail¬
House'^Republicans who: laid"-:
golden
July
Washington believes the effec¬
price shrinking en¬
in
run
terms
The
government
will
reduction
egg
rather
than
last
Jan¬
fresh
exaggeration to
big
War
won't
use
force.
Insiders know the legislation in
present form couldn't possibly
survive
a
Presidential veto.
*
*
*
Export-Import Bank may be¬
the unwilling parent of a
come
(Continued
on
As
National Association of Securities
Dealers, Inc.
deems
The Washington office of Her¬
rick, Waddell & Co., was censured
by NASD after a finding by the
Columbia
that
Committee
the
It
39
reported transactions with
The
cus¬
its
ruling on the
appeal, held that the association
failed
to" give
consideration to
disclosed
amount
to
customers
the
mark-uo taken, and
rendered certain special ad¬
visory services to them. It there¬
the
NASD
that
be
A»
the
action
set "aside
and
of
Street influence."
claimed
is
not
than
the
customary
dis¬
ors
York
in
in
page
38)
,
<
i
\
'
.
i
;>"r 7
;
7.
..
Gibbs,
that
the
institution
could
not
BOUGHT
able
there, being qualified with
Drew
Dudley. One
point about
this
unusual
introduction
to
the'f public
advance information about this
conference."
F. BLEIBTREU &
"
7
.•
79 Wall
CO., Inc.
St., New York 5, N. Y
Telephone HAnover 2-8681-2
-
-
be
and
hopeful. New, this re¬
porter finds, optimism is, here and
tion.
It is an attitude, in Wash¬
ington, of watchful waiting. Wait¬
ing, among other things, to see
whether under the
ment
been
certain
new
ideas
Mexican
MAHER
Sulphur
have
spoken gather mo¬
mentum with the passage of time.
Friends of the original Bret on
quietly
&
HULSEBOSCH
Broken
•
<fc
62 William St.
5, N. Y.
Teletype
7
4-2422
NY
Branch
Budson
'
Securities
New York
Telephone
WHitehall
113
Dealers
Investment
In
manage¬
which
Gulf
cau¬
m..
1-2613
Office
Jersey
City.
N
J
Woods program are watching the
McCloy administration's loan de¬
cisions. The first loan is expected
(Continued on page 49)
*
brief memorandum,
referring. to-
Electric Bond & Share "Stubs"
Central Ohio Light& .Power
Cudahy Packing Co.
>
Common Stock
"7^f-^
Available
.'v■
^
v7"r.
V
f••••
request
ll'l%. ' v •
on
-
request
John Nickerson Sl Co.
Incorporated
Corporation
FREDERIC H. HATCH; S CO., INC.
120 BROADWAY, NEW YORK S, N. Y.
'
SOLD
—
Philippine Mining Lsues
World
Bought—Sold+-*Quoted
^
Dept.)
appeared upon the scene, the re¬
action in Bank circles was favor¬
the
Tide Water Power
'
Tiding
Specialists in
Mr.
press
-7
—
pub1'city director,
Herbert M. Bratter
¥
N.
resignation from the Bank, there
was
in - that
ins itution's higher
circles an acceptance of the fact
BOUGHT—SOLD—QUOTED
Telephone: BArclay 7-5660
Manager
5.
7-.15(K)
1-1248-49
IRANIAN STERLING
■
Tennessee Gas & Transmission
New York Hanseatic
Teletype—NY
CHINESE STERLING
^
on
Exrhaner
Domestic, Canadian and
of
Common Stock*
fr"'
7
A.
A
*Analysis and prospectus
•
L.
Spotlight |
Bank's
$5.50 Old Preferred
.
Telephone: BArclay
Bell
England Gas & Elec. Assn.
Rights*
Stock
and when Mr. McCloy's name f.rst
Following Mr. Eugene Meyer's
ijt
York
number
of bankers and
no
New
New
BROADWAY, NEW YORK
able
"background
i!.-?
Members
successfully organized without the
active par.icipation of Wall Street;
with the exception of one or two
who came upon it privately—had
on
Laird, Bissell & Meeds
120
consider¬
the customer is enabled better tc
(Continued
7
a
of
was
that
the
executive directors of Ihe Bank—
■1:
;
fi¬
closes to its customer the
mark-up
it wili make on the transaction,
re-
Request
on
evaluating profits, prices,
r o- *—
the presence
maxi¬
service
t
to
and edi
New
by
the
be considered a
to
n
nancial writers
promulgated
as
i
duced
have
to
1940
Circular
22)
.j?,\
was
(a practice whjch Her¬
Casualty
Insurance Stocks
';7 ■■■-'$■*
the
The SEC concluded that "When
securities firm rendering more
a
page
;
The day before Mr. John J. McCloy was elected by the Executive
Directors of the World Bank to be President of that institution he
rule.
of
ordered
it
restated
NASD
had
fore
of
Fire &
Washington's curiosity as to Bank's policies
regarding political lending, loaning terms, possible limitation of
activities to hard-currency
capital, and merger of Fund and Bank.
Notes seme public dissatisfaction over
alleged increase in "Wall
disclosure' tc
amount
and that the so-called "5%
evidence
relating to the firm's
dealings, including evidence that
company had in all transac¬
tions
that
the
Earnings Comparison
By HERBERT M. BRATTER
a
mum"
the
sacrificing its earn¬
In a blast
Tuesday evening, Mr.
or
Bratter reports
its former rulinp
"mark-up" is only one fac¬
tor in judging fairness of
prices
that
in
of
Waddell
over,
on
'
pioneered) was not "material" to
the proceedings. The SEC, more¬
1945.
SEC,
view
customers
mark-uo
rules of fair practice by
charging excessive mark-ups in
School
"
of
rick,
New
World Bank in the
Mr.
Toronto
of
(Continued
noteworthy that the SEC
expressly
with
the
NASD's
violated
tomers in
as
the
fact, this persistence of the profit motive and
maintaining profit margins, warrants the
habit
disagreed
had
concern
opinion
at
Also there is the widespread practice of
appropriate.
is
of
District
the
permanent
*
fprthey s{ej)s.
consistent with
of actual
2-0980
1-395
Montreal
statesmanship.
critics, delivered
matter
a
HAnuver
ideological brawl arguing whether in¬
an
In order for Mr. Nathan's thesis to be
valid, an indispensable
accompaniment of increased wages is an OP A or a change in human
nature of businessmen, or both!
been
the
to
nature.
taken' manded the record to the associa¬
against the firm's branch in Wash¬ tion: for such reconsideration ci
ington'by District No. 11 of the thei-case and siiqh
in
issue
New York
Wilfred May
expectation that further wage increases will lead to
price rises, and
hence be inflationary. Whether
particular margins of earnings are
justified constitutes an entirely different argument of an ethical
Exchange Commission on March 28 announced
its long awaited decision in the
application of Herrick, Waddell & Co.,
Inc., for review of disciplinary
11
the
A.
goes wrong in failing to recognize it as axiomatic that in
a
free
society and in a free market businessmen will
ordinarily try for
the profits which supply and demand
allow.
Instead of demon¬
strating that they do so, the pro-Laborite should adopt this instinct
as the major premise for
appraising the effect of wage adjustments.
The Securities and
No.
shift
ST., N. Y. 5
Bell Teletype NY
once
more
elaborated on his contention that businessmen
have not forsaken the profit motive. This
writer believes Mr. Nathan
5% do not
necessarily constitute violation of NASD Fair Practice Rules.
Holds charges can be made for
special services for customers.
Herrick, Waddell & Co., Inc. issues statement commenting on ruling.
Dist.
to
his
the
19)
page
Hemck, Waddell Case
Conduct
fix WILLIAM
Perhaps the foremost fallacy is to persist, as
Robert Nathan still
does, in tying-in the questionof wages with
industry's profit and price policies;
and
.
HART SMITH & CO.
7^:
Nathan
Sei-s aside action holding investment firm had violated Fair Practice
Rules by charging prices not
reasonably related to market. SEC
decision reaffirms its former ruling that
mark-ups above
Business
V
-
will
SEC Reverses NASD Ruling in
had
III.. 7
Ontario
St. Lawrence
no
point out that a further infla¬
tion, "pricing this country out" of the interna¬
tional market, would even constitute a
real threat
to peace, and accelerate the advent
of World
and accept the Senate revisions.
sounding boards for price
reduction pleas, and (2)
Congress
will stress through committee in¬
vestigations and speeches that big
which
And it is
at
as
action
inflationary spiral.
&
Price Brothers
instead, at the begin¬
or
bigger break, and (3) the House
ultimately eat humble pie
Donnacona
Minnesota
the
the last
in the
(1)
President
Truman
continue to use press and
.
a
dying boom,
merely in
dustry is profit-drunkenly gouging the public
ings opportunities on the altar of business
Instead,
radio
ning of
ourselves
on
voluntary
business.
of
by
a
find
are,
1 and may also revise rates
to give lower income earners a
deavors must be measured
price-whittling
1
of
to
we
uary
tiveness- of
long
tax;
Senate will almost certainly re¬
strict the reduction date to next
able to dissenters.
hand,
gasp
■'
determining whether
Company
Consolidated Paper
.
present negotiations and the extent
increases that are agreed on, will go
pay
toward
one
what this strategy
cackling much in their1
legislative hencoop. They know
that
(1)
Senate
Republicans
won't support their bill, (2) the
the
the
far
ap¬
aren't
Abitibi
Brown
the
of
come
of
oi
"7:
the
(2)
bucking
Nobody
■
P
>
that (1) Congress and the
White House will cooperate pur¬
business
i
i
of
standard
sprout.
may
means
posefully
American
pears very sure
the President that prices paid by
oonsumers
the
living is to survive.
in accord with
are
if
STOCKS & BONDS
current
■
/
and steel
unfortunate at this start of the "second
and last
round" of the wage
battle—probably marking
labor's last chance to get what it
can before our
you
look
can
telephone
Established
MEMBERS N.
Teletype: NY.J-583
63(JWaI1
Y. SECURITY
York 5, N. Y.
1888
DEALERS
,
-v;,
^
7
ASSOCIATION
/
..
Bell Teletype NY 1,-897
:
61
Broadway
/
New York 6, N. Y.
-BOwling Green 9-6470
.
THE COMMERCIAL &
(1786)
6
Thursday, April 3, *1945]
FINANCIAL CHRONICLE
J
•«*■
By Moral Suasion
Committee
Administration
this method may appear
to be suc¬
King Canute commanding the
to
recede.
Securities Exchange Act of
mended in a report of the Com¬
mittee on Security Regulation of
the Commerce and Industry As¬
sociation of New York, Inc., re¬
leased
March
28,
which has
been
transmitted to Chairman
and 4he
1933
of
Act
i •;
;V,V.
tide
,
for the second time,
President has publicly at¬
This week,
the
"talk" prices down.
the cabinet is supporting him
to
tempted
And
asked
of
members
Advisory Council to do some
wherever
lower
and
introspection,
ness." And
as
he
that
his press
had
heard
privately from businessmen that
prices of certain basic goods would
be lowered.
ence
later
called
be
Twombiv
Twombly
d
B.
Clarification
(5.)
of
(6.) Restriction of publicity on
charges of wrongdoing.
These are the major points on
which
there has been a
and at¬
of the Securities and Ex¬
Co.
All
Issues
Davis Cofcl & Coke
Julius Garfinckel & Co.
4% %
Conv.
titude
Pfd.
gent effort is now being made to
administer the various securities
laws
to
Congress intended them
administered for the pro¬
as
be
investors
of
tection
Maryland Trust of Bait.
intelli¬
An
Commission.
change
Bayway Terminal
the philosophy
of
tation
Baltimore Transit
J. Caffrey,
healthy reorien¬
James
Chairman
in
and
the
STEIN BROS. & BOYCE
Members New York & Baltimore Stock
Exchanges and other leading exchanges
6 S.
CALVERT
Bell
ST., BALTIMORE 2
Teletype BA 393
New York Telephone REctor 2-3327
already
has
by
the
Commission.
Awkward, complex forms pre¬
scribed in the past have been cast
aside and
simpler, better ones
have been adopted. Rules have
been adopted to cure
BOSTON
f
The dissemination of informa¬
1.
tion to investors.
)■
{
is
It
recognized that
generally
securities.
full: and
conveying
of
purpose
information regarding secure
fair
ities offered under the Act to in¬
the
before they purchase
vestors
crammed
will
investors
Few
prospectus,
it must be with de^
read
to
trouble
as
a
tailed technical information
muclii
comprehensible
to most investors. Moreover, the
of
>
which
is
not
prior to the completion of regis¬
tration of an offering of securities.
made to insurance companies. The
general practice is to send the
prospectus to the investor witl|
the confirmation of sale, that is
other
after he has
addition," there has been a
frank recognition on the part of
panies having more than a mini¬
In
Commission that changes
the
a
fully
carry
being
are
com¬
number of shareholders and
certain minimum amount of as¬
sets to the information and proxy
requirements
their
out the intent of Con¬
Securities
the
of
Act,
Exchange
of 1934 to
and
to
subject
10%
officers, directors and
stockholders to provisions of that
believes
committee
This
Act
that
to
with
respect to which changes should
are
six major subjects
require them
transactions in
stocks of their companies and
their
to pay over
to the companies any
capital gains in such
stocks. As these proposals are not
short-term
(1.) The dissemination of infor¬
mation to investors.
currently being pressed, so far as
no fur¬
(2.) Simplification of the regis¬
this Committee is aware,
tration process.
Integration
(3.)
would
which
report
the
be made in these laws. These are:
the effect of
have been and
proposal is to subject
mum
are
required in various provisions of
the Securities Act of 1933 and the
Securities Exchange Act
as
discussion
ther
infor¬
the
of
of
them
bought the security.
made orally, as no
communication may b£
Such sales
written
are
given an investor in advance of
the
prospectus.
Hence, the in¬
vestor generally makes his com¬
mitment to buy in reliance solely
the oral representations of
upon
the salesman.
situation, it is
remedy this
To
suggested that changes along the
following lines should be made in
the
Securities Act:
(a) The present "tombstone
ad"
(which today merely permits iden¬
tification of the security offered,
and
statement of the price, from
a
(Continued
appears
on
23)
page
i
i
<
sug¬
such
there
direction
sub¬
ination of information to investors
in
been
achieved
the
our
of
and
all of these in this memorandum,
gress.
this
each
to
jects listed above
gested changes.
the Securities Act has failed in its
is
change
recognized that
less
important
Chairman Wm. B. Putney, 3rd
public interest with the least pos¬
sible
interference
with
honest
business. Considerable progress
related
ofl
the prob¬
of
required. It is
there are many
changes
which
would also- be desirable, but no
attempt will be made to cover
which
j This. committee
is vigorously
C£,f(rey
Mfissrs Twomb]y and
,
opposed to two proposals which
Putney are members of the law firm of Putney Twombly Hall &
have been made by others in the
Skidmore, New York City.
past. One proposal is to require
The full text of the report fol-<S>
registration under the Securities
a previous regulation and to make
lows:
Act of 1933 of "private offerings":
Recently, under the guidance possible once again some dissem¬
of
discussion
a
general nature
unproven
,
BALTIMORE
the
curities Exchange Act.
submitted as a
by
follows
There
lems
the antimanipuation provisions of the Se¬
the subject which is to
on
opposition to them in casei
they should be revived.
r
|
basis for discussion at a confer-
A
FA
j
Edward
were
the part of the
powers on
SEC.
■
3rd,
ney,
,
of the Treasury advised
conference
visory
prepared under the guid¬
of
Counsel, Edward B.
Twombly and William B. Put¬
ance
"good busi¬
recently the Secretary
possible,
ter its
were
price
prices
at this time. The Com*
necessary
(4.) An increase in the size of
issues exempted from reg¬
istration, but with broader super¬
small
Secretary,
recommendations
The
Business
the
Association
by
registration require¬
mittee, however, wishes to regis*
Thomas Jefferson Miley.
that
and
ments under the two Acts.
Caffrey, of the Secur¬
ities and Exchange Commission,
Department let it be
the Secretary had
Commerce
known
of the Securities ^
mation
1934 are recom¬
James J.
A few days ago the
in the effort.
affecting six major features
Revision of laws
it seems a bit like
cessful at times,
and Industry Association of New York, through Edward B. \
Counsel, Suggests six major changes and other adjustments. Wants i
unproven allegations of wrong-doing severely restricted.
. '
j
Security Regulation of Commerce
on
of SEC to give publicity to
power
to be trying to persuade
to lower prices.
While
business
\
v
Twombly and William B. Putney, 3rd, of
(Special to the
"Chronicle")—The
appears
.
Recommends Revision of Securities Act
inflation Control
WASHINGTON
...
MONTGOMERY, ALA.
Caffrey to Push for Extension of Disclosure
AndiProxy Requirements to Unlisted Corp.
ALABAMA
Chairman of SEC in statement to "Chronicled makes clear he intends to
Municipal Bonds
recommend to Congress
pas¬
and
and
all issues
Prior Preferred
Circular
Walter J.
on
Request
of legislation v/hich would extend to unregistered companies having 300 or more shareholders
assets of more than $3,000,000 to Securities Act regulations regarding corporate earnings, proxies
trading positions of officers, derectors and 10% stockholders.
sage
Boston & Maine RR.
Inquiries Invited
Extending the disclosure and proxy requirements of the Securi¬
ties Exchange Act of 1934 to the larger corporations whose securities ing
Connolly & Co., Inc.
24 Federal
Street, Boston 10
Tel. Hubbard 3790
THORNTON, M0HR& CO.
Telephone
&
3-6696
Teletype
L. D. 53
is not
MG 84
as
the
in
as
market,
ST. LOUIS
over-
the
for
the
.
are
Commission also expects to renew
the
they
recommendation
in.. 1946
and
to
proxy,
extend
made
-
by
requirements
the
to
stock¬
holders of the
Continuing Interest in
Stix & Co.
Iowa Power & Light Co.
3.30%
Preferred
509
Meredith
OLIVE
closing weeks of the last Con¬
gress as H. K. 7151."
& Exchange
DES
BUILDING
MOINES
9,
IOWA
Members St.
Louis
Stock
Exchange
Bell Tele. DM 184
SPOKANE. WASH.
American Air Filter
NORTHWEST MINING
SECURITIES
American Turf Ass'n
For Immediate Execution of Orders
Consider
H.
Willett
Girdler Corporation
Murphy Chair Company
Reliance
Varnish
or
of
Quotes call TWX Sp-43
Exchange from
A.M.,
Pac.
Std.
10:45
on
to
Floor
11:30
thus have come to learn
but
realistic
to
the
companies
it
way,
the hard
may".. be
pointed out, how far they can
hope to go in that general direc¬
tion.
•
;
•
t
j
Caught Off Balance
Uncertainty and some confusion
in the minds of many interested
bill introduced
in
Palm
Securities
Commission, made it
clear
the
I.B.A.
last
Beach
convention at
December, Mr.
Caffrey is reported to have
said
that he did not propose to renew
the recommendation made at the
Caffrey's remarks on the question
then apparently have had the ef¬
fect of lulling everybody to sleep
on
the issue rather than putting
them
on
retrospect
their
now,
think everyone
This
SEC
which, in
observers
should have kept.
guard
some
uncertainty
intends
over
what the
to, do was forcibly
last session of Congress for ex¬ brought out only last Friday in
tension to unregistered companies a report of the Committee on Se4
to having 300 or more shareholders, curity Regulation of ' the' Corti-1
the House Committee on Inter¬ and assets of more than .$3,000,000 merce & Industry Association oL
state and Foreign Commerce on of the Securities; Exchange Act New York, Inc., which was for¬
March 12 in which he revealed regulations
regarding corporate warded to Mr. Caffrey'at Phila¬
the Commission's plan to suggest earnings, proxies and trading po¬ delphia (printed elsewhere in this
to Congress certain amendments sitions of officers, directors and paper
today).
The Committee
to the statutes after (1) the com¬
10% stockholders. Mr.1 Caffrey is makes mention of a proposal to
mission has had the chance to put saying now, however, that what require registration under the Se¬
the various proposals under con¬ he said then was that he did not curities Act of
1933 of "private
sideration in definite written form propose at the time to push this offerings" along with a reference
and (2) the financial industry has legislation until he had had the to the "other proposal
to sub¬
had the opportunity to submit its chance
to
discuss the question ject companies having more than
comments on them.
with the industry.
He says that a minimum number of sharehold¬
Mr.
Caffrey's reference of he has now had that chance and ers and a certain minimum amount
March 12 to the unregistered com¬ that, as he told the House Com¬ of assets.:to the information and
that the matter stands exactly as
he
LOUISVILLE
a
Then and Now
Caffrey
to the "Commercial
& Financial Chronicle" yesterday
very
Phone 4-7159
J.
At
frey, Chairman of the
ST.LOUISi.mO*
EQUITABLE
James
James J. Caf¬
Stock
in
the
was.
STREET
Publishing Co.
Common
porated
unregistered
companies ap¬
parently have
thought
it
INVESTMENT SECURITIES
Stock
Act
Exchange
unregistered
larger
it
the reporting
provisions of the
proxy
larger
unregistered
companies. people concerning the SEC's in¬
tentions on- the matter date back,
IThis recommendation was incor¬
in fact, to this I.B.A. meeting. Mr.
INCORPORATED
and
40 of the
submitted,
amendments
belong
and
the
officials
WHEELOCK & CUMMINS
page
recommendations
the
time
associations to
which
on
complete 47-page statement.v The
reference is as follows: "At the
the-counter
DES MOINES
buried
of
sort
dealers
many
and
Securities
<§>■
:
dead
issue
an
Montgomery, Alabama
Tele. BS 128
listed
not
are
said it did in his statement
...
Time:
Sp-82
at
other hours.
Co.
,
STANDARD SECURITIES
CORPORATION
m BANKERS BOND
Members Standard Stock Exchange
of Spokane
Incorporated
1st
1
Floor, Kentucky Home Life Bldg.
LOUISVILLE 2, KENTUCKY
Long Distance 238-9
Bell Tele. LS 186
Brokers
-
Peyton
Dealers
-
Underwriters
Building, Spokane
have been missed by mittee a little over two weeks
(though our Washington ago, he does intend now to rec¬
ommend favorable Congressional
correspondent reported this infor-
panies
may
many
mation in the Mar. 13 issue of the
.
Branches at
Kellogg, Idaho and Yakima, Wn.
Chronicle
)
since
.x
,
it
j
?c"c."'
in the financial industry whicn
made. thought that they could talk the
,
was
only in passing, ^rit^ were,,
being ' SEC out of extending the report¬
'I
proxy requirements of the
ties Exchange Act and to
their
Securi¬
subject
officers, directors and
stockholders to provisions of
Act which would
10%
that
require them to
(Continued on page 52)
;
m
.Volume 165
Number 4582
THE COMMERCIAL &
FINANCIAL CHRONICLE
.
Britain's Trade
s
Policy Dilemma The Labor Governments Failuresl
i
Dr.
Einzig points
Britain's
out
difficulty in supporting non-dis¬
crimination and multilateralism in
forthcoming Geneva World Trade
Conference. Holds, despite adverse
situation, British Government
will seek to
carry out commitments under Anglo-American Loan
Agreement, and forsees probability of further U. 3. loans to Britain.
Although
as
yet
we are on
the
of the Geneva
eve
indications of the
no
that
course
the
Conference, there
British
the
main
sue
—
is-"*
that
brought about by non-dis¬
crimination. Meanwhile, however,
ternational
c
o
n
tion
*
n
Loan
6,
e
the
the
the
Britain
Govcom- %
itself
the
cf
its
will
trade
principle
Dr.
Paul
The
Einzig
ain's
Its
the
States might well prove to be un¬
acceptable
to
the
Republican
majority in Congress.
aim
at
tion
at
the
multilateral
not
a
to
discrimina¬
maintenance of the
system.
Nevertheless,
could
has
Conference
quantitative
the
So for all
Britain
purposes
and
and
"soft
currency!'
Government
disre¬
.
position
:
.
-
*
*
'
The problems which confronted the British nation on the morrow of their
victory re¬
quired the strength of a united
people to solve and overcome^ Instead of that, the Social¬
Government, in their hour of unexpected success, set themselves to establish
the
rule of a
.
party,
and
of
within
ty.
H
even
the
letter
of
the
the
of
the
deficit
of
loan
have
By
In
the
circumstances
to
put
up
a
in Geneva in favor
of discrimination. The alternative
strong fight
accept the American policy
hope that in a year or
the
two the United States would
grant
additional billions of dollars, and
to
grant further
loans until the deficit of the bal¬
of payments is eliminated in
of time. "
7
ance
the
course
This
would
11
,37%
p o
•
d
e
torate,
their
to
all
course,
scorn
and hatred has been
poured]
out upon us, not
only by Govern¬
in all parts of the
ment speakers
country,
but,from • the official'
Government newspaper, the "Daily
Herald." One would have thought
For
our
part, when this Govern¬
took office, although
profoundly distressed by the vote
ment
ess
Winston Churchill
it
mission
first
of the
they
formulas
-
.
that the ten
of
electorate—[Laughter]—no
one
than
more
me—we
immedi¬
voted
for
and
theories
upon
the rest of their fellow
coun¬
we
could
any services which
render to the national
cause, not only at home, but in
the United States.
I, and my lead¬
million
us,
people, who
with
or
us,
at the
Election, were harldly fit to live
in the land of their
birth, although
most of them
given
a
ately offered
impose their particular ideolog¬
ical
-
distinguished himself byshowing that aggressive spirit last |
night.
An unbroken stream
which their name and the doc¬
trines of their party, will
long be
identified in British homes.
Universities
(Sir J. Ander¬
son) reminded
us,
That is their offense, from
we
shall
suffer
much,
newspapers, though I am glad I
not here, that the Minister of
was
Defense
and with the guilt and discredit of
were
folks who had!
lot for the national victory.
Gravest
Injury
Is
Psychological
The first and the gravest injury
which our couritry has sustained
trymen, regardless of the peril in
ing^ colleagues, did our utmost, is psychological. It is the injiiry
which we all
stood, regardless of against a good many of our friends to the spirit. I was the Prime Min¬
the urgency of the work to be
here, in our party, to help the ister
responsible, as head of'the
done, most of all, regardless of the Government to obtain the Amer¬
Government, for the present crush¬
comradship by which alone we ican loan of £ 1,000
million, in ing weight of direct taxation' In¬
had survived the war.
spite of the disadvantageous con¬
cluding the almost confiscatory
; This
was
a
crime against the ditions under which it was offer¬ taxation
of wealth. All this* Was
British State and
people, the con¬ ed. I used such personal'influence done with a
sequences of which have hamper¬
ed 6ur recovery; darkened our fu¬
ture and now endanger our
very
life.
In
our
immense adminis¬
trative difficulty, the' Prime Min¬
ister and his colleagues should
,
of
mean,
ture.
which
Scottish
deemed
self-preservation,
continue
the
neverthel
is a strong temptation for
Britain, through sheer instinct of
would
Friend the
Member
for
of
there
in
as
right hon.
my
its
look
things, however, the proceeds will
be
exhausted
long before such
equilibrium can be hoped to be
reached.
then,
world, to the plight in
which it lies this
afternoon, and
with even more
alarming pros¬
pects opening upon us in the fu¬
g
only
restored
the
n
the total elec¬
beneficial effects of non-dis¬
equilibrium.
i
a v
until
payments
from its proud and glorious
posi¬
tion'in the
par¬
Brit
of
«»-
sect
a
a
as I had in the United
States, as
the Chancellor of the
Exchequer
knows, to clear
American
away
misunderstandings,
so far as it is
in the power of any
private citizen
to do any such
thing. On every
have concentrated upon their im¬
practical tasks, and left
tfie< fulfilment of party ambition
great
majority by
a
Conservative
Prime Minister of
Party and by a
the Conservative
Chancellor
of
the
Exchequer jof
Party. I was al¬
responsible,, as head of the
Government, for the controls and
the Conservative
so
occasion thitherto, my
colleagues regulations of all kinds that were
and I have emphasized the im¬ in
forqe at the end of the war. We
portance of najfipnal savings, and must not forget that afternoon !in
The Labor
Govern4ient,j {^Iwdys and^the^satisfactiori^bfparty ap- we shall continue to do
so, but I May, 1940—I was not here; I had
conditions it is for Britain moraU rekdy 46' buy, cheap - popularity
petities, at teist until we, and the have an increasing feeling, in view to go to Paris—when
the&iormojus
ly,"politically, ;and even finaiiciaU at. the cost of sacrificing long- rest-of the world
with us,; stood of inflation- that at any rate the
Tory majorities in both Houses bf
ly' impossible to borne out defi¬ term interests,. is /not \likely to on firmer and safer
ground. Be¬ smallest class of savings might be
nitely in favor of the opposite be deterred by this consideration
Parliament voted into , the hands
fore they nationalized our indus¬ linked to some
permanent stand¬ of the Government, for the sake
policy. Apart altogether from the from taking the line of the least
pi
tries they should have national¬ ard of values. We have
voted with our country's
survival,,practically
possible political effects of such resistance. On the other hand, it ized
themselves. They should have the
Government
in
everything all the rights of property
a course, it
might have unfavor- may be reluctant to put itself in set
aqd,
country
before
party,
and they have done for the sake of more precious
a
able financial reactions.
position in which it would be
still, of liberty on
For it
shown
that
they were
Britons our country, but what has been which what we have called civil¬
at the mercy of Wall Street or of
would
be
idle
to
expect
the
first and Socialists
only second. the return? An aggressive party ization is built. That ought not to
United
States
to
grant further a Republican Administration. The
They should have set the day-to¬ attack has been made upon us.
be forgotten when hon. Members
assistance if the spirit of the terms
memory of the so-called "bank¬
day well-being of the whole mass
I am
ers'
under which the loan was
sorry
to see, from' the
vamp" of 1931, when the
(Continued on page 40)
grant¬
I
of the nation before and above
ed is disregarded.
Government
was
And it looks Labor
forced,
the gratification of party passions.
as
though Britain would badly out of office largely by the in¬ In
this they would have found an
fluence of American
need fresh assistance before we
finance, is honorable and
worthy mission,
still fresh in the mind of Social¬
are much older.
from
which
lasting
honor
for
United
ist leaders. For this reason more
On the other hand, it is becom¬
themselves and their party might
than any other, discrimination is
ing increasingly clear that in the
have been reached.
not likely to be given
Rliodesian Selection Trust
up lightly
Washington Agreement the Brit¬
by Britain in Geneva.
ish
Have Spread Class Warfare
Government
committed
©00
"
under
Washington Agreement, there can
be no doubt about the
meaning of
itr*sf>irit. A loan, of $3,750,000,-
object
meet
balance
is to
the
light-heartedly
gard
American
interests
and
American feelings in this matter.
Whatever may be the technical
*
for
currency
crimination
in any case the British claims for
tariff
reduction
in
the
United
hand
period.
means
"hard
main
to
was
commitment, is how¬
ever, sufficiently vague to allow
wide scope for interpretation, and
free
no
countries.
non-dis-
practical
have
with
countries
of
discrimination.
payments
the effects
reconstruction
'
favor
of
to
correcting the maldistribution of
ernment
in
balance
exposed
By RT. HON. WINSTON CHURCHILL*
Former Prime Minister of Great Britain
ist
it could have been defended dur¬
ing
mitted
,
be
of having relinquished the weap¬
ons of discrimination with which
-
Dec.
1945,
British
will
Agreeof
British
v
c
with
ment
.
the
trade. In
;
economic policy of British Labor
Party hampers Britain's recovery and endangers its
very
Hfe, Mr. Churchill characterizes its greatest evil as
"injury to the spirit." Points out since end of war
British living standards have declined
and people are undernourished.
Attacks Labor Government's
neglect in coal shortage, and holds situation could have
been avoided by
precautionary action. De¬
cries heavy
occupation expenditures and increase in civil service costs and accuses
Labor Government
of trying to
destroy wealth and free markets.
are
trade
ination in in-
,
Asserting
export trade might secure its due
share in the expansion of world
of
discrim¬
v
...
delegates will
adopt towards
I
granted on the condition
that Britain would* support the
American trade policy.
In • such
was
that
Britain
stature of
a
would
sink
to
the
perenhiaP borrower^
mediate
.
.
*
*
*
'
'
Kingdom 4%, 1960-90
its
,
.
-
country to
altogether
suicidal policy. Apart
from
what
may
be
a
agreed at Geneva, the terms of the
Loan
Agreement themselves im¬
pose an unbearable burden
on
the
British balance of payments. The
loss of foreign exchange that is
<
certain to arise
as
result of the
a
premature restoration of the
vertibility of sterling
on
con¬
July 15,
<1947, is expected to cut short the
respite) obtained as a result of the
Moan,
Had Britain .borrowed
on
; commercial
terms—-say, at 5% interest, and repayment in 25 years
*
—the
burden
•I payments
nearly
the
balance
not
on
would
have
of
been
heavy as that arising
from the "strings" attached to
the
"political" loan. The chances are
that a large part of what is left of
as
the. proceeds
-
.
lost
ias
of the
by, the convertibility.
of
the
adoption of
non-discrimination at Geneva on
^'Britain's
balance
of
.
.
would
In
be
even
existing
.
payments
disasterous.
such
beneficial effects as
may arise to
Britain from a return to
multi¬
lateral- trade
.
more
circumstances
*
1
are
bound
to
to be
On the other hand
effects are expected
heavy and immediate.
sibly in
10
years'
Firm Name Now
Leedy,
time
Pos¬
Britain's
Gaumont-Britisli
contrary, mouthing slo¬
of envy, hatred and malice,
they have spread class warfare
throughout the land and all sec¬
tions
Wheeler & Mercian
ORLANDO, FLA.
—
The firm
of
name
Leedy, Wheeler & Co.
has
been
changed
to - Leedy,
Wheeler & Alleman, Inc. Offices
will
be
Bank
firm
continued
Building.
are
in
the
Florida
Officers
Loomis C.
of. the
Leedy, Presi¬
dent; Howard S. Wheeler, Execu¬
tive
Vice-President;
Paul
Vice-President,
and
Pierce,
Monroe
Alleman.
Secretary
of
society,
and
they
F.
and
Treasurer.
divided, in
a
that in which it has
vided, in the
have
less
under
two
their
ever
in
the
past.
years,
our
country,
control,
Goodbody & Co.
been di¬
many party conflicts
witnessed
than
British Securities Dept.
different way from
has
In
Members
N.
NEW YORK 6, N. Y.
*
Telephone BArclay 7-0100
•
Teletype NY 1-672
*Speech of Mr. Churchill in the
House of
Commons, London, Eng¬
land, March 12, 1947.
*Hungerford Plastics
SJElMM&Co.
Memberf N.Y. Security Dealers Ass'n
*
Metal
*
SEMINOLE OIL & GAS CORP.
Forming Corp.
A Producing Company
District Theatres
*Dumont Electric
a
V. Stock Exchange and Other Principal Exchanges
115 BROADWAY
fallen
O
We render
Scopkony, Ltd.
have
divided this nation, in its hour of
serious need, as it has never been
L.
brokerage service
PROSPECTUS ON REQUEST
:
Prospectus Available
in all Unlisted Securities for
Bonks and Dealers
FIRST COLONY
be
very gradual.
the adverse
On the
gans
loan will be
airesult of the drain caused
The*' effect
A
By PAUL EINZIG
'
v.
(1787)
60 Wall
CORPORATION
Street, New York 5
52 Wall St.
Telephone: WHitehall 3-7830
Teletype Nos. NY 1-2762-3
;
(M—
Tel. HA 2-8080
F. H. KOLLER & CO., Inc.
Members N. Y.
New York 5,
N. Y.
Tele. NY 1-2425
111
Security Dealers Ass'n
BROADWAY, NEW YORK 6, N. Y.
BArclay 7-0570
NY 1-1026
J
8
McDonald Sworn in
Labor Management
Public
By EDWIN E. WITTE*
s
labor and management.
Management Problems in 1947" it is
past developments.
discussing the "Labor
In
I
will
the
late
approximately 2,600,000 shares of new common stock.
formed in 1936 to function as a subholding com¬
pany for part of the water works interests of American Water Works
& Electric Company, Inc.
As now set up, it has outstanding 5,000
shares of preferred stock and 6,000"$
—
~
shares of common, all owned by used by the latter to retire its
the top company. This inactive own preferred slock.
ert
E.
in bonds and
The company was
holding company will become the
company" for all the water
properties of the system,
"top
say
which
to
are
There
interes's.
electric
the
from
divorced
be
are
subsidiaries, one-half
of which have been in the system
68
of
these
tions
Union agreements were of un¬
since 1886 and one-half since 1929.
questioned
legality,
including
About
one-half
the
companies
agreements for the closed shop—
are located
in Pennsylvania and
and without the limitation speci¬
the balance in 20 other states in
fied in the Wagner Act that closed
the east, middlewest and south.
shop agreement must be made
with a union representing a ma¬ Some of the largest cities served
are
Birmingham,
Chattanooga,
jority of the employes.
-
known
As early as 1918
tion Principles to
little
the
about
period
before
1935
when
Con¬
gress
enacted
the
National
Rela¬
Labor
Act,
popularly
Unionism
this
Itr
100
had
vived
the
sur¬
all
downs
of
ing that conditions do not change
materially);* Estimated
consoli¬
This
later
industries.'/
and
collective
Tlrs
ex-President
Justice William
then
the
which
Howard
was
many
unionism
from
cycle, all
firmly
industries,;
but was almost completely ex¬
cluded from the mass production
in
came
of
political changes, and all climates
public opinion., It
statement
the War Labor Board of that day,
Chief
Taft
was
co-Chairman.
The
1946
will
offered
be
the
to
common
American
of
stockholders
Works & Electric
in
a
Water
share-for-
was
The offered price will
share ratio.
first
included in the Norris-LaGuardia
Act of 1932 and in the
the
Bankruptcy
field
While
for the business.
to bid
date
the
of
registration
working men to increase their
"wages, shorten hours of labor or
improve working conditions, are
$
lawful.
even
had
There
one
never
case
In which
for
nation
these
a
been
combi¬
had
purposes
Roosevelt Administration.
would
This
same
section
tral
provision is the cen¬
of the Wagner Act.
This law differs from the earlier
legislation to safeguard the right
of workers to form labor organi¬
"laws, regardless of the size of the
zations and engage in collective
.union or the percentage of the
bargaining only in that it imple¬
.employes in a given industry inments this statement of the rights
been held to violate the anti-trust
within
-'.luded
its
membership.
"■" ' '.1 i;
'V■■■'J'
*An address by
Dr. Witte before
he University' of Cincinnati busi.ness and professional men's group
cmrrent
affairs forum, Cincinnati,
of workers,
by a short list of un¬
fair labor practices of employers.
The
most important of these un¬
fair
labor
practices
are
discrimi¬
nation against workers for union
Ohio, March 21, 1947.
(Continued
on page
to be about the earliest
seem
It is understood
the stand-by period will be ten
days,
during which the
rights
will be effective, and af'er which
date for bidding.
The Wagner Act
45)
unsubscribed balance of stock
be offered to the
general
any
will
Some
mon
2-300.000 shares
will
stock
used
be
com¬
for
re¬
quired exchanges which will "col¬
820
.
__
.
__
920
1939
substantial part of the
A
cash realized by American Water
Works Company will be passed up
to
its
Works
We
announce
investment
American
parent,
&
Electric,
and
com¬
industrial and 16%
miscellaneous.
hanking business in
Subsidiaries
300,000.
with
change
to
dered
their
books
to
cost, 12 with plant ac¬
counts totaling about $58,000,000
have
completed
their studies,
original
classifying $6,100,000 in account
100.5 and $1,900,000 in account 107.
The latter amount has been elimi¬
in
the
balance sheet,
new
$6,100,000 is being amor¬
tized. Five companies with plant
account
of
$6,500,000
are
still
and the
of
borhood
cess
of
$8-10,000,000
in
ex¬
original cost, plus an un¬
known amount for
companies not
be ing.
the
firm
&
'
McDonaW
McDonald
A.
McDonald-
of
Company,
and
Chicago
of
World
of
1.1.
War
is a
Since
positions,
chiefly in the ice cream and dairy
products line and in 1921-23 was
employment manager of the
Illuminating
Electric
Cleveland
N. Y. Munic. Bond Club
14th Annual Field
Day
Bond Club of
New York will hold its 14th an¬
The
Municipal
nual Field
Day at the Sleepy Hol¬
Club, Scarborough-
Country
low
on-Huason, New York, cn Friday,
June
20.
Members of the Field Day
mittee
Com¬
are:
Laidlaw & Co.,
R. Sullivan,
Phelps, Fenn & Co., and James D.
t'onpi^g. Braun, Bosworth & Co.,
Sub-Chairman;
P.
Hurley
Bogardus, Barr Bros. & Co.; Frank
J. Brophy, R. S. Dickson & Co.;
Thomas C. Cafone, W. E. Hutton
& Co.; Marquette deBary, Harris,
Hall & Co.; Eugene L. DeStaebler,
F. S. Moseley & Co.; Gordon B.
Duval, Guaranty Trust Co.; George
B. Gibbons, Jr., Geo. B. Gibbons
& Co., Inc.; William T. Hall, Jr.;
Frank L. Lucke,
Chairman;
Leonard
Hills, Eldridge & Co.;
White & Co.;
First Boston
Corp.; Richard N. Rand, B. J. Van
Ingen & Co.; William J. Riley, and
Joseph F .Vandernoot, R. W. Pressprich & Co.
J.
Albert
Stocks
Puget Sound Power &
Federal Water & Gas
Southwestern Public Service
f
M(
Indiana Gas & Water
Tucson Gas &
Electric
Public Service of Indiana
West Virginia
Milloy,
Light
Delaware Power & Light
Water
Incorporated
Kaiser & Co. Admitting
Meyerson & Stecher
SAN
,
H.
Harold E. Leaf, R. D.
quarters
135 South LaSalle Street
A
H
Pres¬
of
Edward H.
our
John W. Clarke
addihaving
as
total
plant accounts of $102,000,000 are
presently subject to original
not
Trading Markets in Common
pre-war
in
acted
Since 1934 he has been
The pro forma consolidated bal¬ : Resident of the H. A.' McDonald
ance sheet shows
plant account, Creamery Company.
In politics,
including untangibles, to approxi¬ Mr. McDonald is a Republican. He
mately $166,707,000 and the de¬ is a director of the Detroit Board
preciation reserves is about $21,- of Commerce.
the resumption of our
*
Mr. McDon¬
ald,
tion to
Company.
Water subject to this method of account¬
will
as
919 he has had various
770
residential, 23%
mercial, 16%
duties
Commissioner.
veteran
System revenues in 1946 were
about 45%
..
his
up
University
750
1940
working on their original cost
lapse" two subholdipg companies estimates. Thus it appears that the
in the water system, Community combined plant figure of $166,Water Service and Ohio Cities 700,000 may include in the neigh¬
Water.
March
of Detroit,
Michigan. Born in Cherokee, Iowa,
on June 17,
1894, Mr. McDonald
attended the Law School of I the
780
1943
nated
public.
frey in Phila¬
delphia
on
Moore
bargaining had long been of un¬
Act of 1933, both of which were
might normally fix a bidding date cost, although about 30% of these
doubted legality. While there had
approved by President Hoover. It around the end of April, some may later become subject to write¬
been a few early cases in which
was
reaffirmed
in Section 7(a)
labor unions were held to, be 11delay may result from the neces¬ downs in an amount estimated at
of the National Industrial Recov¬
sity of clearing tax questions with $3 500.000 to 154,000,000. Of the 17
legal, it had long been firmly es¬
ery Act of the early days of the
the Treasury Department. May 1 subsidiaries which have been or¬
tablished
that
combinations of
-
in
Chairman;/
by
James J. Caf-
vestment
750
.
the John Hancock Life Insurance
Of the 2,600,000-odd
shares to be outstanding, 2,343,105
1951,
Creamery Company, was until his
appointment, a member of the in¬
760
1944
$15,000,000 10-year 3% col¬
Company.
5,
sworn
was
ident
870
1945
works
written first have to be determined by
into statute law in the Railway competitive bids submitted for a
Labor Act of 1926, approved by s'and-by underwriting. It is un¬
President Coolidge.
It also was derstood that two groups are in
principle
the
dated pro forma earnings on
stock have been as follows:
lateral trust bonds will be sold to
the
of
Both
the initial dividend of 33
be paid six mon hs after
prospectus (assum¬
1941
and
,
annum,
cents to
the date of the
subsidiaries.
E. Witte
and
the business
established
water
June
took
1942
ers.
of
Edwin
ups
the
to
Healy,
which expires
the
new
„
Rob¬
26, and
immediately
rate on
stock will be 65 cents per
companies, there are eight other
ers
old
in
country.
years
addition
In
of
term
dicates that the dividend
etc.
Peoria,
statement in¬
registration
rights of self organization
and
collective
bargaining, free
from all interference by employ¬
was
over
in the Declara¬
Govern Labor
Pittsburgh,
Wichita,
The
during World War I, it
was declared to be the policy of
the United States to accord work¬
Relations
Act.
Wagner
then
'
the
as
member of the Securities and
Exchange Commission to fill out
the
with the
statement
istration
works
logical to begin with a review of
Inc.
Co,, Inc., last Friday amended its reg¬
SEC covering issuance of $15,000,000
American Water Works
Labor Board, after reviewing develop¬
ments under Wagner Act, contends new labor legislation will not
aid in accomplishing industrial peace. Sees threat of renewed
strikes in mass production industries regardless of new Congres¬
sional legislation. Says there is still wide gap between thinking of
labor and management, and that giving status and security to a
union does not guarantee no further labor trouble but is merely an
essential condition of getting along with union.
Warns against
\
Harry A. McDonald, who was
appointed by President Truman*
as a
American Water Works Company,
of Economics, University of Wisconsin
Former member of War
extremists in both
As SEC Member
Utility Securities
Problems *in f 19 47
Chairman, Department
Thursday, April 3, 1947
FINANCIAL CHRONICLE
THE COMMERCIAL &
(1788)
Franklin 2324
members
CHICAGO 3
Paine,Webber, Jackson & Curtis
ESTABLISHED
187®
Co., v Russ
of the New
Francisco
San
CALIF.
FRANCISCO,
&
Kaiser
'
Stock
—
Building,
York and
Exchanges,
leading exchanges, will
and other
admit Harry Meyerson and 'Henry
partnership in the firm
10.
Both have been
with the firm for some time, Mr.
Stecher to
as
We
are
pleased to
announce
that
-
MR. AUGUST G.
has been admitted to
in
our
New
England Public Service/
FUCHS
of
April
Meyerson. being ^in chcirge^ of
.
brokerage department.
Plain Pfds.
partnership
Hemphill, Noyes Adds
Northern Indiana Public Service
firm.
Common
Hemphill,
Broad Street,
&
Noyes
Co.,
:•31
15
New York City, an¬
the
following
have
nounce
become
George B.Wallace & Co.
4
15 William Street
7*
New York
Gilbert J. Postley & Co.
5, N. Y.
29
BROADWAY, NEW YORK 6, N.
April 1, 1947
Direct Wire to
■
.1
iW
Y.
that
associated with their firm
as
registered representatives: Ros-
coe
B. Ayers,
Stephen
Chicago
'•
v
Jr., Alfred J. Coyle,
B. Finch,
John C. Mc-
Leod. and William L.
Sneed.
Volume 165
Number 4582
THE COMMERCIAL &
FINANCIAL CHRONICLE
(1789)
Federal Government Must
I
Ahead in
Casualty Insurance
By BENJAMIN RUSH, JR.*
*
;
I
?
"
Member House of Representatives from Georgia
tinued
to cancel Regulation W,
contends present government control entails burdensome
reporting
a
by the Federal
Board
of
issued
Governors
by
the
Federal
of
Reserve
System,
was
adopted
Aug. 21, 1941, to become effective
Sept. 1, 1941. It was issued under
/authority of Presidential Execu¬
tive Order No. 8843, dated Aug. 9,
1941.
Regulation
W
applies
now
down-payment and maturity
quirements
ies
to
re¬
12 major categor¬
consumers
durable goods.
of
on
'Its regulations apply to any per¬
son who
is engaged in the busi¬
ness of making extensions of in¬
stallment
credit
$2,000
less
in
of
amounts
discounting of
Purchasing obligations arising out
of
such
extensions
of
credit,
whether the person is a merchant,
bank, loan company or finance
or
or
tinuation
convenience
of
came
ive
own
time,
coal
It affects the business
of every
in
automobiles,
stoves,
washing and ironing machines, re¬
frigerators, radios, sewing ma¬
chines,
vacuum
cleaners,
and
other
listed
articles.
It
requires that every credit
installment buyer of automobiles,
and
all
cept
other
certain
listed
items
articles
ex¬
household
of
furniture, must pay at least onethird of the purchase price as a
cash payment, and must pay the
remaining two-thirds of the pur¬
chase price in not less than fif¬
teen months.
It
.
further
merchant
requires that
and
installment
dealer who
credit
sales
every
who
articles,
money
fi¬
buy these
buys purchase
who
or
a
capital, and will con¬
prosperity of America
the
not
least,
one
of the
not
this section of American business
government
license from the Federal Gov¬
ernment to do business, and may
be prosecuted for violation of the
regulations, and punished by a
fine of $10,000 or imprisonment
for 10 years, or both.
was
troubles
the
latter
A general
bituminous
year.
in
the
prevented
action
only
by
of
the
declaring the strike
issuing an injuction
and
familiar sound to this?
a
national debt
regimentation
particularly
The
considered to be
was
all
enforce
these
the
reports
and
requirements
of
to
it
terprise. The removal of this
annual
reg¬
ulation will be quite a
step in the
direction
of
that
goal
toward
which the American
people have
been looking,
could
the
be
ever
income
of
regulation.
familv
that
breeches
as a
inaugurated
temporary war-time measure
when there
trol of the
it,
was
so
outgrowing
was
fast
that
of motor
time
and
was
use
a
need
for
con¬
manufacture
sale of the articles affected
absorbing
national
of
increase
now
decreasing
the
peace
need
Vanden Broeck
Co., members of the New York
ums
of
Stock
Exchange, will ttp formed
of May 1st with offices at 40
Exchange Place, New York City.
clothes for him
in the
1920,
point in the
now
is
what
tion of
I
not
am
aware
demand
on
an
so
units
many
annual
was secured
national income of
estimated
(Continued
■
on
We
are
pleased to
of
units Has
an
page
annual
48)
announce
the opening j
,
//,
.
Branch Office under the
a
management of
its
Mr. Kenneth L Howard
at
form
61
cas¬
Broadway, New. York 6, N. Y.
BOwling Green 9-4900
LAIRD &
at
COMPANY,
$416,505,144,
to
Banks
an increase of over
—
our
New York correspondent
Service
Brokers
—
•/
...
Dealers in
Western Stocks
Respect¬
..
:
years
than
Direct wires
had refused to handle other
lines
fire
and
marine
Los
were
San
Frank
Lansburgh has been active
stood
at
Angeles
Diego
to
our
offices ins V
Salt Lake City
Beverly Hills
Denver
;
„
i
V
Riverside
\
►
•
Reno
Butte
Ogden
A. HOGLE & CO.
J
Established 1915
over
Members
individual floor broker and
thereto was a member of
New York Stock
*An address by Mr. Rush before
the Minnesota Association of In¬
in
the past represented
Bear, Stearns
& Co. in
Amsterdam, Holland.
surance
March
Salt Lake Stock
Agents, St. Paul, Minn.,
Exchange
Exchange
and other
28, 1947.
New York Curb Exchange
Los Angeles Stock Exchange
Principal Exchanges
132 South Main Street
Salt Lake
After
April 1st,
1947
We
City, Utah
It is undemocratic in its
The
the Investment
announce
the opening of
our
FOREIGN BOND DEPARTMENT
Banking Business
under the direction of
'
°f
:
purchaser
of
appli¬
a
car
LEEDY, WHEELER
•
y
'
'
«
:
'
&
Mr. J.
CO.
will be conducted
under the
by it, yet a man who buys
priced car is obliged to
comply with its strict terms. There
■
Listed and Unlisted
Foreign Dollar Bonds
name
than $2,000 is not af¬
ewhurger, Loeb i GO.
of
lower
Henry Davis
\
•
fected
many
pleased to
immediate fu¬
them, and when that point is
reached, Regulation W will great¬
ly retard sales of these articles.
more
are
'
.
MEMBERS NEW YORK STOCK EXCHANGE
AND OTHER EXCHANGES
v.--.>•>
veterans and others who
want to establish homes,
buy fur¬
niture,
possibly
washing/ ma¬
chines, refrigerators and the like,
and possibly an
automobile, and
pay for all these items in regular
installments
from
their
salaries.
Unless Regulation W is
cancelled,
LEEDY, WHEELER & ALLEMAN
15 BROAD STREET,
4
ORLANDO
•
FLORIDA
SOUND INVESTMENT
N.Y.5, N.Y.
BRANCH OFFICES
incorporated
i
fl
EAST
28th
57 WEST
2091
SERVICE SINCE
STREET
525 SEVENTH
57th
AVENUE, AT 38th ST.
STREET, AT 6th AVE.
>■
BROADWAY, BETWEEN 72nd & 73rd ST.
upon
replacement
of 22,000,000
based but, with
been
approximately $68,000,000,000.
this
able old insurance agents who for
Partners will be Winfried H.
Op¬
penheimer,
Alfred
L.
Vanden
However, there
for
are
1946.
to
where production of these
goods will catch up with demand
a
in
teresting to note that the produc¬
casualty premi¬
had reached the amazing total
ture
priced
the number of registrations
over
It is in¬
many.
stock
400% in the last decade.
as
time
peace
time production.
demand for them.
cation.
luxury for the few,
for
has changed.
Production of these listed items
has not yet caught up with the
.
a
were
*
a
of
necessity for the
and
needed
resources
production,
is
registra¬
tions in the United
States, which
represents
an
increase
of
25%
defense.
The situation
Instead
this time, it is estimated that
there
will be over" 40,000,GOO
all-
an
of installment cred¬
because the
■■
production delays, it will
take approximately four years to
the demand.
At the end of
high in 1929 of 5,358,000 units
the automobile thus
became,
instead
a
vehicles reached
Growth of Casualty Insurance
In
Oppenheimer,
Neu
/
-
benevolent
newly organized
ualty companies.
Vanden Broeck & Co.
Mr.
"
fill
very
parents, with an eye towards the
profitable
employment
of
this
strapping youngster, were creating
Forming Oppenheimer,
Bear, Stearns & Co.
Regulation W
•
a
paid out of an
$65,928,000,000.
of dozens of
prior
r
have
indi¬
replacement demand
a
that upstart in the insurance
ness,
new
an
,;
estimates
that
automobile, other
1915
And what about the casualty busi¬
namely, that the
Government will get out of busi¬
ness, and let the American people
get back into business.
as
the
of
from
to 1930,
important part in
this great growth. The production
finally opening casualty depart¬
Neu, Robert R. ments and new agencies were
The enforcement of this regu¬
Lansburgh, the Exchange mem¬ springing up everywhere.
lation necessarily means the mak¬
ber, general partners, and Robert
Let us briefly review the devel¬
ing of detailed reports by the J. Ullman and
George W. Ullman, opments of the next two decades.
business man, and a force of fed¬ limited
partners.
By 1930, stock casualty premiums
eral employees large enough to
Mr.
had doubled and
review
cated
large, standing at $24,299,000,000, that it was doubted whether
to that extent,
the American system of free en¬
Broeck,
the
of
so
and to reestablish
&
Jr.
preventing the leaders from per¬
mitting the men to strike." Is there
beneficial
effects
of
canceling
Regulation W will be to relieve
from
labor
prompt
illegal
but
Rush,
government in
whole.
Last
notes executed for them,
must be registered with, and have
$
as
to
these
individual,
company,
or
lends money to
tribute
makes
of
listed items, and every bank,
nance
vestment to
30.000.000;
Various
played
the
strike
-
fields
*
dealer
Benjamin
during
of
past; what about the
development
a
."serious
-
months
in¬
more
to
threatened
So
me that of '22,000,000
units in the next
insurance has come of three years cannot be
considered
Now that the youngster has
excessive, whereas the estimated
matured, a full and useful life for production for a similar
'period is
him
stretches
into
the
future. only 18,000,000 units. This
would
There is no question but that the indicate
that, barring strikes and
history of that
will cause markets to expand and
production to increase. It will give
registrations was reached in 1941,
with a total of
34,400.000, which
dropped in 1946 to approximately
had
it!
age.
same
from
quote
their own family lives by their
own work and
labor, and on terms
which they can meet. Its removal
of
casualty
.
and,
elected to that
was
•
the
$1,324,890,000
reached.Think
and
According to the United States
Publip lloads Administration, tl
$900,000- highest
number
of
automobile
This
amazing growth
business only indicates to
frage
was
finally adopt¬
year
an-j
by
during
over
By 1945, the stagger¬
of
much for the
Jan¬
the
at
■
future?
uary
1920.
Women's Suf-
homes and
work to labor and
in
increasing
stand
ing; total
been
effect¬
.
to
000 in 1940.
hibition be¬
ed.
two years had elapsed since the end o
In the spring of 1920 Senator
Warren
now,
$100,000,000
1930's
National Pro¬
the
$800,000,000,
other
by the
Democrats.
The removal of these restric¬
tions will help the American vet¬
erans and American
workers to
reestablish their
was
-
family,
such
as
washing
ma¬
chines, ironing machines, stoves,
refrigerators, radios, vacuum
cleaners, and many other items of
household and kitchen furniture.
as
the situation in 1920?
*
dent
materially add to the
and
was
in 1920, then
N? WaS nom*nated for President by the Republicans
Roosevelt
make it difficult indeed for many
to purchase articles
comfort
And what
war.
nominated for
Vice
Presi¬
housewives
more
company.
earners
which would
con¬
*
years ago,
vember; F. D.
will be un¬
these articles. A con¬
of Regulation W will
many wage
able to buy
great
offic
^
W,
and forecasts
more
risks.
Twenty-seven
I
On March 10,1947,1 introduced H.R. 2443, ft bill to cancel Regu¬
lation W and to prevent regulation of consumer credit
Regulation
expansion, with
aviation
policy forms.
) by business, is no longer defendable as wartime measure, hinders
j peacetime production, and is undemocratic In its application,
government.
Insurance Co. of North America
executive traces rapid
growth of this field in last
quarter-century
profitable results, particularly in
automobile, workmen's compensation,
Predicts great increase in
premiums and a reasonable competitive rate struc¬
ture, as result of implications in Public Law 15.
Advocates multiple line
underwriting and simplifi¬
cation of
and
! Congressman Davis, explaining his bill
i
Vice-President, Indemnity
r
Casualty insurance
By HON. JAMES C. DAVIS
1899
Thursday, April 3, 1947
COMMERCIAL & FINANCIAL CHRONICLE
THE
(1790)
10
Central Steel & Wire Company
& .Co.,
—Memorandum—Caswell
South
120
Dealer-Broker Investment
Company
3, 111.
cago
Recommendations and Literature
New Directors of Commercial Credit
Chi¬
Street,
Salle
La
Electric Illuminating
Cleveland
Co.—Analysis with particular ref¬
erence to
its investment position
pleased
It is understood that the firms mentioned will he
to send interested parties the following literature:
as
operating
an
utility equity—
Street,
Rosenthal & Co., 60 Beaver
currently de¬ 123 South Broad Street, Philadel¬
phia 9, Pa.
pressed stocks which appear at¬
Also
available are valuations
tractive—Newburger, Loeb & Co.,
and appraisals of Railroad Equip¬
15
BroadStreet, New York 5,
New York 4,
N. Y.
•Appeal—Letter on
N. Y.
■•■"a#
of
City
and
Certificates
ment
Philadelphia Bonds.
_
Companies—
Public Utility Common Stocks-—
Analysis—Kalb, Voorhis & Co., 15 Brochure containing brief * sket¬
Broad Street, New York 5, N. Y.
ches of 10 stocks set up in "pack¬
Also available is a memorand¬
age" form—G. A. Saxton & Co.,;
um on International Telephone &
Inc., 70 Pine Street, New, York
Telegraph.
5, N. Y.
Issues discussed are
Power, Black
Hills
Power
&
Light, Central
Illinois Electric & Gas, Central
Maine
Power,
Iowa
Southern
Arkansas-Missouri
Which May Earn
1947 Than in 1946—Circontaining comprehensive
statistical data on 1182 stocks— Utilities,
Companies
More in
! cular
Gas &
Electric Corp,
discussing
pros¬
pects—A. M. Ktdder & Co., 1
Street, New York 5, N. Y.
Wall
Comercial Solvents Corporation
Equipment
Auto
i
Columbia
—Memorandum
Low.
&
—Memorandum—Jacobs
Broadway, New York 6, N. Y.i
61
Seligman, Lubetkin
—
available
Also
is
&
Street, New-
41 Broad
York 4, N. Y.
Inc.,
Co.,
Corp.—j
Dearborn
Consolidated
Circular
circular
a
on
Foundation Company.
Lake Superior District
Cudahy Packing Co. — Memo¬
Puget Sound Power &
randum on the common stock —
Light, Virginia Electric & Power,
John Nickerson & Co., Inc., 61
West Virginia Water Service, and
! Broadway, New York 6, N. Y.
1
Comparative Insurance Stock Western Light & Telephone.
Also available is the current
j Prices—Based on earnings for 12
L. A. Darling Co.—Descriptive
months ended Dec. 31, 1946—Gey- issue of the Republic Utility Stock
brochure
and
annual
report—
|er & Co., Inc., 67 Wall Street, Guide containing quotations on
Moreland & Co., Penobscot Build¬
'New York 5, N. Y.
public utility preferred and com¬
ing, Detroit 26, Mich.
mon stocks.
Heller & Co., 30
York 5, N. Y.
! Stanley
Pine
Power,
Street, New
}
Earnings Comparison of Fire &
Casualty Insurance Stocks for 1946
Circular — Laird, Bissell, &
Railroad Developments of the
Week—Summary—Vilas &Hickey, port—Aetna Securities Corpora¬
tion, 111 Broadway, New York 6,
49 Wall Street, New York 5, N. Y.
•—
Meeds, 120
Broadway, New York
5,N. Y.
,
...
.
,
Bonds —
Pennsylvania Legal
j,
York 5,
Y.
jlBroad Street, New York 4, N.
Wall Street, New
Treat & Co., 40
N. Y.
Co.—Cir¬
American Box Board
cular—Seligman, Lubetkin & Co.,
York 4,
Inc., 41 Broad Street, New
N. Y.
Co. Com.
^♦Miller Manufacturing Co.
I Oil Exploration Co. Com.
,
on
cell
231 So. La Salle St.
1
>
Teletype CG 955
*
■
Co., 50
4, N. Y.
Circular
are
and
Corporation,
—
circulars
on
Polaroid
Auto
Monroe
Equipment.
'
Hanson-V
a n
Marshall &
Winkle-Munning
analysis—Maxwell,
Co.—Detailed
cir¬
cular—Adams & Co., 231 South
La Salle Street, Chicago 4, 111.
Hoe
R.
Co., Inc.—New
&
Hydraulic Press Manufacturing
A.
Pur-
Broadway,
New
and
Co.,
Railroad
Jackson Co. — Discus¬
sion of situation—Sartorius & Co.,
Byron
—
Walter J. Connolly &
—
Colorado Milling & Elev., Com.
Gas
Com.
39
Broadway, New York 6, N. Y.
Company—Analysis—
D.
Jones
&
Co.,
300
Preferred—Detailed
current operations of the
.
♦Seismograph Service Corp.,Com.
1
$6
^Prospectus Available on Request.
subsidiaries
tem,
5aal M.Davis &Uo.
Established 1916
•
I
So. La Salle
10
making
in the
the
up
sys¬
issue of the
March
&
Co.,
208
Salle Street, Chicago
South
4, 111.
Street, St. Louis 2,
Co.—Late
data-
Thornton, Mohr & Co., First Na¬
tional Bank Building, Montgom¬
Bell
Long
-
Lumber
—
Memo¬
111.
Foote
Brothers
Gear
&
Hart Carter Company
New York
Circular
—
Mohawk Val¬
—
ley Investing Co., Inc., 238
esee Street, Utica 2, N. Y.
Gen¬
Co.
Warner
—
Memorandum on
outlook—H. M. Byllesby and Co.,
New
England Gas & Electric Stock Exchange Building, Phila¬
Association—Analysis—New York delphia 2, Pa.
Hanseatic
Corporation,
120
Broadway, New York 5, N. Y.
Corporation
Oliver
—
£
of
Study
prospects as speculation—H. Hentz
Co., 60 Beaver Street, New
York 4, N. Y.
&
National Bank
&
D.
S.
Co.—Analysis—
Warren
May & Gannon, Inc., 161 Devon¬
shire Street, Boston 10, Mass.
Also available is a detailed re¬
port on Hytron Radio
and Elec*
tronics Corp.
Trus'
Company
Gas
Ohio
West
With Colvin,
Inc.
Corporation of
Detailed m e m orandum—Bear, Stearns & Co., 1
Service
Jersey
New
Mendenhall Co.
(Special to The Financial
Street, New York 5, N. Y.
Also
available
is
a
compre¬
Wall
Richard
Stine
A.
&
and
Hanan
now
are
denhall
Car
with Colvin, Men¬
127
Co.,
Montgomery
Joins Dean Witter
Mass.
(Special to The Financial
LOS ANGELES,
Rockwell
—
Broad
Manufacturing Co.—
&
Witter
Steiner, Rouse & Co..
Street, New York 4,
Co.,
Staff
.
Chronicle)
CALIF.—Dean
632 South Spring
Street have added
Neil F. Camp¬
bell to their staff.
N. Y.
Machine
Roberts and Oake Inc.
♦Stone
5y2's of '52
With Siayton & Co.
Co.—Analysis
Salle
(Special to The Financial
LOS
ANGELES,
Leonard Krupnick is
United Artists Theatre Circuit
Incorporated—Discussion of spec¬
ulative prospects—Ward & Com¬
Corporation
& Co.,
Chronicle)
CALIF.
Inc., 3277 Wilshire,
Container
DEEP ROCK OIL CORP.
—
SOLD
Common
& SO. BEND RR Com.
CHICAGO SO. SHORE
I
>
BOUGHT
Markets in
v
Corporation
—
POWER CO. 6% & 7% Pfds.
NORTHERN STATES
QUOTED
Request
*
Prospectus Available
^
208 SOUTH LA SALLE ST.
A.C.AU3fN«®COMEANY
Telephone Randolph 4068
York
-j-?-.
537
H. M.
.
CHICAGO 4, ILLINOIS
r
Chicago
New York
^
:';i Incorporated J
Boston
!
Milwaukee
Byllesby and Company
„
Incorporated
1
Street, Chicago 3
135 So. La Salle
Teletype CG 273
Telephone State 8711
.
Minneapolis
Omaha
New York
Philadelphia :i
•
Pittsburgh1'
—
Boule¬
vard.
We Maintain Active
*
|j
with Slaytoii
\
Uarco, Inc.
CG
-4
John M.
Street.
Co.—Up-toCircular—Lerner & Co., 10
Office
Square, Boston 9,
Steel
CALIF.
FRANCISCO,
SAN
Pullman, Inc.
hensive circular on
Ralston
Chronicle)
—
Street, Chicago 3, 111.
♦United Printers & Publishers, Inc.
Direct Private Wire to New
—
analysis—C. E
Analysis—J. J. O'Connor & Co.,
Unterberg & Co., 61 Broadway,
135 1 South
La
Salle
Street,,
New York 6, N. Y.
Chicago 3, 111.
Also
available is an offering
circular on Stern & Stern Textiles,
Co.—First quarter
♦National Alumiriate Corporation
,
•*
Utility
Bell System
Co.—Analysis
Mohawk Cotton Mills,
Utica &
Inc.
6, N. Y.
Snap-on Tools Corporation
.
ChU
1
1
MacWhyte Company
Central Public
on
New
—Caswell & Co., -120 S. La
♦Colorado Milling & Elevator Company
FairmanCo.L
Recent Review
Street,
Salle
La
4, 111.
& Co., Ill Broadway,
—Ira Haupt
25
La
♦Booth Fisheries Corporation
SINCE 1908 ■BBHHB9
'
Street,
52 Wall
Y.
Missouri Utilities
Analysis
4, Ala.
ery
South
cago
York 5, N.
Post
Cola
Lime
INDUSTRIAL COMMON STOCKS
Teletype CG 405
i
—
Co. —
T. Haas,
Utilities
Cities
United
Memorandum—First Colony Cor¬
date
Mo.
Gisholt Machine Company
Fred.W.
Corporation
Forming
Showers Brothers
St., Chicago 3
Indianapolis, Ind.
Rockford,
Cleveland, Ohio
,
Metal
5,!
■*
' <•
Sternberg Principal Stock Exchanges
Chicago Board of Trade
Tel. Franklin 8622
North Fourth
various
"Investment Barometer"—Fred. W.
Fairman
<
Re¬
Edward
view and discussion of nature and
^Central Steel & Wire Co.,
*
Public
Utility 5^s of
'52 and Consolidated Electric and
Central
Common
Card memorandum—Ray
Miller Manufacturing Co.
Kendall
* National Tank Co.,
Watch Co.
Public
Maine
&
Lumber
Bell
Long
Mass.
I
N. Y.
Co., 647 South Spring
Street, Los Angeles 14, Calif.
Co., 24 Federal Street, Boston 10,
i
*
available
National Paper & Type,
Memorandum
—
circular—Edward
Boston
-
Dearborn 1501
-
Oil
&
York
COMSTOCK & CO.
■
Mfg.
Vacuum Concrete; Barcala
tailed
>
CHICAGO 4
Telecommunications
—Newburger & Hano, 61 Broad¬ Co.—Detailed
Analysis—Comstock
way, New York 6, N. Y.
& Co., 231 South La Salle Street,
Chicago 4, 111.
Barnsdall
Oil Company — De¬
Also available are analyses of
Corporation
request
Brothers, 1420
Philadelphia 2, Pa.
Also available are memoranda
on
Bird & Son, Inc. and Gruen
pany,
Walnut Street,
Public
analysis available
*Detailed
\
Artists;
Corp.; United
IJfaudler,
Barnsdall
Trailmobile Company
!■
Lanova Corp.; Mo¬
Whart¬
on Iron & Steel; Purolator Prod¬
ucts; Upson Corp.; Alabama Mills;
♦Long-Bell Lumber Company
'
Also available are memoranda
W. L. Douglas Shoe Co.; Hart¬
hawk Rubber; and Taylor
PresfcMfg. Co.
Kropp Forge Co. Com.
York
74 Trinity Place, New York
6, N. Y.
Broadway,
Co., 120
N. Y.
ford Empire;
* Hydraulic
i Old Ben Coal;
#
and
120 Broadway, New York
randum—Buckley
mers,
on
Howard Industries, Inc.
:
&
New York 5,
Holeproof Hosiery Co.
,
:
Baltimore.
Circular—Troster, Currie & Sum¬
Also
—Ward
Elgin Ry. Units
ft. Wayne Corrugated Paper
I
more;
memoranda
are
Company
Corrugating Company.
Aspinook corporation—Circular
Burgess Battery
President, Gerotor May Company, Balti¬
Thomas B. Butler, President, Safe Deposit & Trust Company,
poration,
•Compilation—Stroud & Co., Inc.,
Chgo. Auro. &
Roi
Finch
r
•
Le
on
Corporation,
President of Commercial Credit
and
Baltimore; E. E. Yaggy, Jr.,
231
available
Also
circular—Amos
Aerovox—New
Motion
Picture
Industry — A
:Study—Hayden, Stone & Co., 25
Company
Credit
W.
Officer;
N. Y.
1
I:
Electric Company—Re¬
Dumont
Charles J. Zimmerer, Vice-President and Senior
Bruce Wylie, Vice-President of Commercial.
Left to Right:
Financial
Minneapolis
secured
that
real
its
By ROGER W. BABSON
disputes. Holds better labor situation is due to re¬
moval of price controls and changed
political complexion. Pre-
;
to
out need for practice of basic principles.
services
are
divided
up
among
and
me
If,
determined
are
our
to
Fabricating.
desire
of
Reason:
the unions to
reputedly
"checks
and balances"
protection.
own
high
The
share
profits
in
these
to
Roger W. Babson
Frankly, I
cerned
am
not
this
over
lieve
that
after
too
now
con¬
nomic
upheaval. I be¬
union
labor
Three
lose
another
has
before
we
true measure of
This announcement is under
circumstances
no
securities. The
be
is
of
some
struggle
and
imany of them
for
but
demands
are
simply
camou¬
agement and the government for
"the control of
industry. Knowing
this, both employers and employ¬
ees ought to muster
every ounce
The bonds
are
subject
January 1,1950, or in
prosperity. These
K-;
.
margin
requirements,.;
favored reducing the
present
50%
requirement,
with
'V: posed.
.
to
s
remain
has
buy
any
of such
4
28,1947
Authority
Due
shown below
as
r
to
part,
"
'
*
*
i
v<
-
.--
,
•.
.
T>;
'
r
:
•
/■:
...
.
JNTS, INTEREST RATES, MATURITIES AND YIELDS (OR
PRICES)
I
.
..yt s
/
•**
.
'
Rate
$725,000
1947
July 1
.75%
1948
Jan. 1
.90
4
2 H'
430,000
2a
490,000
1949
745,000
2A
2A
1950
1.20
755,000
2A
!
1.30
765,000
2A
■
Jan. 1
1.40
780,000
2A
July !
1.50
785,000
2A
550,000
1960
1951
560,000
Jan. 1
1.60
795,000
2H
•
July 1
1952
2X
2K
450,000
1.65
810,000
2H
!
Jan. 1
1.70
820,000
2A
July 1
1.80
i
July 1
f
830,000
1961
1.85
655,000
2A
1954 Jan. 1
1.90
865,000
•'July 1
1.95
880,000
2A
680,000
2A
1955
Jan. 1
2.00
890,000
2A
685,000
2A
\
July 1
2.05
905,000
1956 Jan. 1
2.10
915,000
2XA
July 1
2.10
925,000
2A
2H
705,000
2A
715,000
2.30
1,025,000
s
2X
1957
Jan. 1
2.15
935,000
1,035,000
2K
Jan. 1
2.35
1,050,000
•
July 1
2.40
1,090,000
2A
Jan. 1
2.45
1,100,000
1,115,000
2.70
2.50
1,135,000
2.70
July 1
2.50
1,150,000
2.70
1966
2.55
2.55
•'
'
t
2A
1967
;
2.70
100
1,190,000
^1,210,000
1,225,000
99A
July 1
97
1974
97
97
Jan. 1
100
July 1
100
1975 Jan. 1
•
■
.
July 1
1976
'
100
100
Jan. 1
99A
July 1
'99 A
: 2.70
'
Jan. 1
97
July 1
2.70
100
97A
July 1
Jan. 1
2.70
1,180,000
Jan. I
i;
.
Jan. 1
1973
1,160,000
July i
'
98
98
97 A
1972
,
*
July 1
98A
Jan. 1
July 1
■
2A
2.45
*
f-
98A
T'
July 1
>
2A
Jan. 1
1
1971 Jan. 1
2A
2A
1965
2A
950,000
warning handwriting is
clearly updn the wall for fu¬
Y July
.
2A
2.30
1,065,000
2H
99
99
1969 Jan. 1
1970
-
Jan. 1
1,075,000
-
Price
Jan. 1
July 1
■
2A
2.35
,
2A
2A
1968
2A
,
July 1
1964 Jan. 1
2A
670,000
1
1,010,000
2.40
1963
•'
j.:Maturity
i 2A
1,000,000
•
1
Jan. 1
1962
2A
r;
2A
:
July 1
2A
840,000
855,000
•
Rate
j
985,000
2.25
2.25
•
Interest
j 2A%
^
975,000
v
1.75
1953 Jan. 1
2*4
695,000
2.20
Jan. 1
k
July 1
'
2A
2H
640,000
$ 960,000
"
2A
550,000
(b) the political complexion has
changed considerably in recent
months;
1
•'
ipy '
Amount
2.20
July l
'
t-
'
555,000
(a) the fact that price controls
Jhave been lifted, which allows a
^greater latitude for bargaining;
1959
Jan. 1
;
i
2.15%
•
July 1
,
Jan. 1
July 1
1958
~
»-
.
Maturity
{or Price)
Maturity
1957
2A%
2A
July 1
2A
to
Rate
735,000
1.10
July 1
2a
495,000
ter to:
Amount
2 A%
435,000
tumbled
Maturity
■<
2A
270,000
a
Maturity
Interest
f'k.
■
Yield
Yield
' ^
.
ft 7
-4".
^
'
Interest
Amount
280,000
will
to
'
.appreciably since November (July
'720;
September 541; November
477; December 228; January 191).
3 attribute this change for the bet¬
(c)
& Co.
the
Principal and semi-annual interest, January 1 and July 1, payable at the Head Office of The National
City Bank of New York, New York thy, or, at the optidr*/
of the holder or
registered owner, at the office of The National City Bank of N<(w Yorkj San
Juan Branch, San Juan, Puerto Rico. Coupon "bonds in ?>
denomination of $1,000, registerable as to
principal only or as to both principal and interest. Fully registered bonds may be reconverted into
coupon bonds.,
nuisance, a thorn in the flesh, if
.you will, of industry throughout
1947, the fact remains that the
strikes
429
Exchange Mr.
Grimsditch
was
previously with Carter H. Corbrey
any
'.YvYYv'^ '
opposed.
On
Stock
i
Attitude
of
were
redemption prior to their respective maturities, upon not less than 30
days' prior published notice, either in whole on any date on or after
by lot, in inverse order of their maturities from moneys in the
Sinking Fund, on any interest payment date not earlier than
January 1,
1952, at the following pricesj plus accrued interest: 104% on or
prior to July 1, 1956; 103% thereafter ar.d on or prior to July 1,
1961; 102% thereafter and on or
prior to July 1, 1966; 101% thereafter and on or prior to July 1,1971; 100% thereafter.
'
'
I 50,000
incidence
Los
Co.,
mem¬
,
American way of life.
strikes
the
&
Street,
Angeles
1977 Jan. 1
99A
,2.70
July 1
99A
-
•
99
A,
a
-very
ture
strikers.
Messrs.
(Plus accrued interest)
Green,
Xewis and Murray all have sense
enough to know that under pres¬
belliger¬
ence and aggression can
only lead
to public hostility and a possible
These bonds are offered
for delivery when, as and if issued and delivered to us and
subject to the
approval of all legal proceedings by Mitchell and Pershing (Masslich and Mitchell), New- York
City.
ent conditions continued
immediate
retaliation
Congress.
new
In
the
from
light
the
of
The First Boston
these trends I predict that 1947—
much to the surprise of many em¬
ployers
Blyth & Co., Inc.
and
employees alike —
may see the fewest critical labor
•disputes since 1939.
Corporation
B. J. Van
Harriman Ripley & Co.
Ingen & Co. Inc.
Lehman Brothers
Drexel & Co.
Incorporated
Banco de Foment© de Puerto Rico
Banco Popular de Puerto Rico
Credito y Ahorro Ponceno
Banco de Ponce
New York
Wage Outlook for 1947
Goldman, Sachs & Co.
i
I
As
a
result
of
this
return
.
A. C. Allyn and
Otis & Co.
R. W.
expect that where
for
the
wage
Household Furnishings, Radio and
Pressprich & Co.
Harris, Hall & Company
E. H. Rollins & Sons
Incorporated
Merrill Lynch, Pierce, Fenner & Beane
Braun, Bosworth & Co.
Eldredge & Co.
Incorporated
Shields &
Lee
Company
First of Michigan Corporation
?
•
The Ranson-Davidson
Company, Inc.
Hawley, Shepard & Co.
Higginson Corporation
Stranahan, Harris & Co.
,
McDonald &
Incorporated
Company
Incorporated
greatest
increases and
fringe concessions will probably
come
from the Shipping indus¬
tries, Motion Pictures, Chemicals,
pressure
Phelps, Fenn & Co.
(Incorporated)
tries.
can
Estabrook & Co.
(Incorporated)
Graham. Parsons & Co.
4 continues,
Blair & Co., Inc.
Company
Incorporated
John Nuveen & Co.
'Trucking, Clothing Stores, Cotton
'Textiles,
Printing,
Painting,
Plumbing, and Shipping indus¬
You
Agency
Barcus, Kindred & Co.
to
pormalcy there have been during
Uecember and January some wage
Increases
for
workers
in
the
unrest
Union Securities Corporation
Field, Richards & Co.
Hornblower & Weeks
Schoellkopf, Hutton & Pomeroy, Inc.
Paine, Webber, Jackson & Curtis
The First Cleveland
Corporation
The Milwaukee
-
ex-<
hours, and 14&
Under the provisions of the Acts of
Congress now in force, the bonds and income therefrom
are,
in the opinion of
counsel, exempt from Federal income and State taxation.
Reasons for Labor's Change in
While
of
Fairman
January 1, 1947
•only for their own mutual bene¬
fit, but for the ultimate preserva¬
)
bers
tension of trading
become
Electric Revenue Bonds
Dated
•t)f courage and common sense in
erder
to
negotiate wisely,
not
our
Seventh
West
426 broker^
Saturday closing-
that
flage to cover up the real struggle
(between the unions, owner-man¬
tion of
realize
with
210
eco¬
has
Puerto Rico Water Resources
labor
real trouble is that
are
Grimsditch
Chicago.
with 51
opposed; 281 favored
ANGELES, CALIF.«~Nor-
V.
of
in favor of
portal-to-
as
question
these
legitimate. The
sociates
were
as
paid
no
LOS
and
margin
ac¬
cording to the Stock Brokers' As-*
Grimsditch With Fairman
man
year-round
closings,
requirements,
March
sick-leave, in¬
creased paid
holidays, health and
welfare funds, etc.
There
their
overwhelm¬
of
market
lower
*
-
are
$50,000,000
demands
concessions
pay,
to
they
favor
ingly in
Saturday
110,-
Where industries cannot afford
further basic wage increases there
portal
are
should not
NEW ISSUE
already begun to slough off.
•certain
masses
we
handicap
legitimate
desires
better their condition.
truths, how¬
can
the Wane
management
probably
vealed that
march and
be construed as an
offer of these securities for sale or as a solicitation
of an offer
Prospectus may be obtained in
any State in which this announcement is circulated from
only such of the undersigned as are registered dealers in such State.
}
'
"Of course, there will be
continued
•demands for small wage increases.
•will
The
the
free
minimum of
man-
6,027 strikes
It is my belief that the
Las
CHICAGO, ILL. — A city-wid«
poll of Chicago stock
brokers re¬
extending
demand
fundamental
did in 1946.
fbetween
government
on
principles must 'be under¬
stood
afford
000,000
on
a
by
(3)
bureaucrats;
much
for
Favor
interference
associated
Bear in mind these
ever:
We
cannot
Strikes
Chicago Brokers
Five-Day Week
increased
most
readily by
enterprise with
The Need for the Practice
of
Basic Principles
the
businesses.
must
produce.
some
Metal
in
we
1947
days through
be
can
be
prosperous
-we
income
neighbors.
therefore,
we
tional
(Special to The Financial Chronicle)
you
and
collective
and
our
more
,
conservative
by
people;
and
(b)
the
way
these
goods and
are:—(1) Only by increasing
national production will there be
to divide; (2) Our true na¬
leaders.
the
more
recreation, etc., which is
its
labor
find
better
sponsibilities, they become
The economic well-being of any
country is largely
by (a) the amount of food, homes, clothing,
produced
will
are
advice of its resident em¬
ployers than it ever did before.
This means that when the
liberal
interests are faced with full re¬
industries will grant wage increases in 1947, and
points
some
its
Labor will not give
up
Mr. Babson foresees fewer strikes and
change in labor's attitude
diets
than
bargaining and certain other new
privileges; but it will listen more
in industrial
|
it
power,
employers
friends
Company
Chas. E. Weigold & Co.
Incorporated
37
op¬
T*
Department ol
Engineer¬
ing Co., Newport News, submitted
die lowest of five bids, $3,543,951.
The highest bid, $3,965,625, was
tendered by Francis A. Canuso &
Sons, Philadelphia.
The bids were within the $4,-
Inc.
Bird & Son,
Stockholders Want Action
At the annual meeting of Alan Wood Steel Co., a preferred stock¬
holders' group, headed by Henry P. Carr and Joseph L. O'Brien,
Philadelphia security dealers, demanded that the management take
constructive action in respect to adopting a plan of recapitalization.
Carl W. Fenninger, chairman of a committee appointed by the
management a year ago to study possible plans of recapitalization,
Alan Wood
Gruen Watch Company...
\temub
BROTHERS
BUCKLEY
Stock Exchangee
Lo» Atiqeus*
f
'
oj
Member
Also
000,000 estimated by department
officials as the cost of construct¬
was
Pnvuit
New
In contrast to
inability
the committee's
report a plan, the
to
stockholders' group
plan of its own.
Moreover they indicated a dead¬
line of Aug. 1, 1947, by which
time a satisfactory plan should
*
be approved. In the event of
management's failure to pro¬
vide a plan by that date, the
group
threatened to institute
court proceedings
and bring
preferred
presented
Philadelphia
Bank & Insurance
Transportation Co.
Philadelphia
a
of the
liquidation
com¬
1421
Phila. Phone '
-
PH 257
Teletype
for the issuance of
convertible
tive
2-2280
WHitehall 4-2400
HAnover
Locust 7-1477
$50 in cumula^5% debentures
callable at 100; 10 shares
convertible 5% pre¬
ferred stock, par $10, callable at
due 1967,
of cumulative
11%,''and
interest in
continuing
A
Earnings
ferred were $55 per
by
share.
5 times earnings.
dividend record.
reported
No debt—Long
The
in
for this leader
construction industry.
Outlook
building
plan provides that each
present share of common would
be exchanged for one share of
7 Conservative Management.
.
Excellent
share at the
end of 1946.
Company total $5.68 per
Available around
for each
cash
in
$5
present preferred. Ac¬
cumulations on the present pre¬
of
share
GRINNELL CORP.
1946
$1, and the com¬
par
common,
would be authorized to
an
additional
2,000,000
shares of common to be sold
pany
issue
BOENN1NG &l CO.
1606 Walnut St.,
debentures
The
PH 30
Phnne to N.
Private
publicly at $6 per share.
Philadelphia 3
PEnnypacker S-8200
ferred would be
Y. C.
1957
If
and
and
in
•
:
.
■'it
•
•••.
V7'.i:,..7
ft;
<jfteo.
take
will
to
Issue
* bond
$500,000,006.
Stock lExcbapge
Bell System
Bld^
Phils.'
CHAPLIN
.
and
N. Y. Stock Exch.
.
v
COMPANY
Pitts. Stock Exch.
New York Curb Exch. (Assoc.)
(419 Wood Street
*
61 Broadway
PITTSBURGH 22, PA.
a
make
not
^
Bowling Green 9-3987
standing.
Vice-President in charge of
$2.20
•
' -.
r'
,
"
'v-,
•?'
I
-4
.
<<
•
•
•
M
to
Wawaset
paid
<
-
4
;
•
4
4
.
-
■
4
Mills
<-
4
4
-
j
>'
Tuesday, March 11, there
another addition to the dis¬
On
was
tinguished list of century-old in¬
stitutions in Philadelphia. Trades-
National Bank & Trust Co.
mens
.7; observed ■ its 100th anniversary.
V. 4'
4-
Staples has "been
and Chairman
A.
P.
.
board of Her$hey
• '
.
; •
of; the
-Scott
7'
•
Chester,
Paper Co.,
,
•
Pa.,
consolidated
net
Chocolate Corp.; reports v1946
Murrie,; re¬ earnings of >$2,01»,frl4,: after; all
7 ;
iv-;
* ■ '--v., >
;
;
elected
W. F.' R.
succeed
to
tired.;.
♦
<•
\
R. A. Enders.
This
compares
with
share earned in 1945.
•.
the ]late
"
j
succeed
to
Harrisburg,
per
■
Vice-
is
„
charges, compared, with $1,756,205
(
of the first
of
Russell, Jr.
4
$38,000,000
disposal system—exten¬
4
4
sewage
Bell System Teletype—PG 473
sion
of
Northeast Sewage
—
have been
the
Treatment
Works
gasoline and gas fuel from soft
years
Corporate Shorts
.
.
..
*
coal. By the end
step in Philadelphia's
Empire Southern Gas
Empire
exceed
to
Bids for construction
NEW YORK, N. T.
Grant 3900
American Box Board
Botany Worsted
be
will
.
folders On April 25.
•
-
Members
i
com¬
1.9
..
City
2, Pa.;
HAnover 2-4552
Teletype PH 220
Wawaset
receive
will
share
'
Robert Storey, former
J.
.
-Issues
Direct Wire to New York
Exchange
Y. Telephone
N.
of
share
each
of
Contemplated; that the
in 1945: After preferred dividend
method <of payment will include :'; JPiijUp
dent in charge of
investments, requirements,' net per common
a
formula
providing that, exInsurance Co. of. North America, was $2.07 compared with $2.00 in
service men and women will re¬
has been elected a
director of 1945.
.7
■
7 ...
'
ceive $10 a month for domestic
;
Pennsylvania Power & Light Co.
service and $15 per : month for
4
*
*
'
Pittsburgh Consolidation Coal
overseas duty, with a $500 "ceil¬
David H. {Harshaw has been Co. has announced plans for a
ing."
t 7 :
4
4 •
4 (
elected President of John B. Stet¬
broad research and development
son
Co.,
filling
the
vacancy
Sewage Bids Received created by the death of George L. program aimed at the production
It
Western Pennsylvania
Si <£o.
Philadelphia Stock
the holder
distribution of assets,
President
:.
,*,% ■'
%
Members
iary,
President, has been elected Presi¬
dent of Camp Curtin Trust Co.,
a
,;i. 7x :'
j
Established 1890
"down-stream"
with its operating subsid¬
Warner Company., In the
has
Pew,
.*
'
expected to approve
are
company's
merger
posed the necessary legislation.
Authorization will be sought for
••; '*
Trading Department Active in
I
Co.
ties
the
constitutional
possible
the payment of a state bonus
to the veterans of Pennsylvania,
hut Representative Baker Royer
fR. Lancaster) has already pro¬
It
amendment
*
v:
.
77
*
*
s
4
is, and has always
been considered;
an
investment
trust. It operates no rolling stock.
.-,-7;:/.r
Common /
scheduled for April 28,
stockholders of Wawaset Securi¬
meeting
September.
July, August and
77'
-
Pennroad
**
^lanpire Steel S
/
.7«
■
.
stockholders'
annual
the
■At
,1
Warner
Philadelphia Stock
Exchange will close Saturdays 7 Company common. In addition, a
cash dividend
of 32 cents per
beginning May 31 through June,
Veterans' Bonus
Penna.
Pennroad Corporation
Trading Markets
#
the
York,
convertible into
0
❖
.
"
7 ; 7
made."
mon
production.
*
-
mark.
also set a new
pre¬
new
until
at $10 thereafter until
1967.
.-
f
situation that the change in name
-
at $6.25 per share
common
COrtlandt 7-1202
•
often
public
—
stockholders' plan provides
The
Philadelphia 3
New York Phones
Street,
Chestnut
the
Philadelphia Transportation Co.
.Pennsylvania Power. & tight
sold privately during March
Co. has arranged for a loaniof
$5,094,000 equipment Jrust cer¬
road
last
year.
Pending final
$11,000,000 for two and a half
determination of legal fees, $3,- tificates to finance the purchase
years at 1V2% interest. The Chase
of new equipment ordered for
000,000 was set aside fpr this con¬
National Bank is acting as agent
delivery this year. On order are
tingency and $12,000,000 added to
for a group of nine banks which
210 streamlined street cars and 65
capital surplus.
will; supply the funds.; Proceeds
trackless trolleys.
During 1946,
The largest fee recommended
will be used in connection with
83
new
passenger vehicles,
all
the
company's $27,000,000 con¬
$1,950,000 — would go to a
buses, were placed in service. |The
struction and expansion program.
group including the
law firm
equipment
certificates
mature
4
*
4
'
"
headed by former U. S. Senator
serially over 10 years and bear an
Barium
Steel Corp.; has sold
Daniel Hastings of Wilmington;
average interest rate of 2.56%.
the firm of Evans, Bayard and
Jacobs Aircraft Engine Co., PottsFrick, Philadelphia; Marshall,
town, Penna., for $1,500,000 to
A. R. Jacobs, Vice-President and
Carey and Doub, Baltimore, and
Personals
General Manager.
Hugh F. O'Donnell, New York.
During 1946,
Joseph N. Pew, Jr., Chairman Barium acquired control of seven
This group had been chief coun¬
of the board of Sun Oil Co., has
sel for Pennroad for 11 years.
plants, including Central Iron &
announced the establishment of a
Steel Co. of Harrisburg.
4
4
4
5-member
executive
committee
4
*
4
In its annual report, United Gas to
administer policies and
co¬
Electric
Storage Battery Co.,
Improvement Co. states that sales ordinate company operations. In
with general offices in Philadel¬
of gas by its subsidiary, Phila¬ addition to Mr.
Pew, members
delphia Gas Works Co., in 1946 are Robert G. Dunlop, President; phia, reported for 1946 consoli¬
were
largest in history, totaling S. B. Eckert, Vice-President in dated net income amounting- to
27,514,042,000 cubic feet, an in¬ charge
of
marketing;
C.
H. $3,283,510, after all charges and
taxes, equivalent to $3.62 a share
crease of 6.7% for the year. Op¬
Thayer, Vice-President in charge
erating revenues of $21,615,732 of manufacturing, and; John G. on 907,810 shares of common out¬
Damages, amounting, to $15,000,000
were awarded and paid to Penn¬
sets.
II.N.NASH&CO.
Railroad,
against the Pennsylvania
and distribution of its as-
pany
suits
prosecuted
successfully
•
about
Pfd.A Common
3-6s 2039.
fees aggregating $2,485,000
had been recommended to be paid
to 16 attorneys and three stock¬
holders' committee members who
legal
had
in
mind and it was to correct that
committee^
7
—~ plant area. Bids did not include
aspects of the Yet something that might be construction of about 10 miles of
situation and had found it diffi¬ lightly described as a "lawyers' intercepting sewers in the area
club car" rolled into the com¬
drained by the proposed sewage
cult to arrive at any plan that
would do justice to all parties at pany's Philadelphia terminal last works.
*
*
*
Monday when U. S. District Judge
interest.
f n
•
•
George A. Welsh announced that
Following the pattern of New
System between
York and Lot Angetst
n irt
Philadelphia
title
confusion
caused
studied various
tiaa
Philadelphia 2
New York
7
Lo» Angelee
Pittsburgh P*
H**:r*.tovrn;.H'i; N. Y. Telephone—WHitehmll 3-7253
1420 W»1»U* Street,
7
long
,
misleading
and
conduit within the
and the main
that
t'riist
"Needless to say, our very
tanks
aeration
and
settling
ing
since
and
j
company,
his
stockholders
told
Exchange
Curb
York
Neto
Philadelphia and
York,
Neu
Members
Request
on
1870,
time has been a banking and
Public Works. Virginia
Pennsylvania Brevities
Long Bell Lumber
-77
about
ness
the
at
received
\
Thursday, April 3, 1947
CHRONICLE
COMMERCIAL & FINANCIAL
THE
(1792)
12
of three or four
it^s hoped to have in op¬
eration a plant costing approxi¬
Pennsylvania Company for In¬
$120,000,000 capable 'of
on
Lives and Granting mately
Annuities, one of the state's larg- turning out 400,000,000 cubic feet
sst banking institutions operating
of gas a day. Standard Oil De¬
18
offices in Philadelphia
and
velopment Corp. is collaborating.
suburbs, has officially shortened
4-4
4
its cumbersome title to Pennsyl¬
Peoples Natural
Gas Co. .of
vania Company for Banking and
surance
Steel
Nazareth Cement
Sterling Motor. Truck
Available
Warner Company
Publications
,
H. M.
Byllesby & Company
PHILADELPHIA OFFICE
Stock Exchange BIdg.
RAILROAD
Valuation and Appraisal
>
.
PH 73
6-3717
CITY OF PHILADELPHIA BONDS
Compilation of
BONDS
Copies
on
Offered only
000
Com.
STROUD & COMPANY
•
H
' T
PEnnypacker 5-0100 7 f
123 SO. BROAD
Incorporated
7
t
1528 Walnut St., Philadelphia 2
New
York
*'
.
San
Boston
.
Chicago
Francisco
•
STREET
PHILADELPHIA
-
.
PEnny packer
Allentown
9.
PA.
5-7330
Pittsburgh
i
„
Little Inch.
...
^
Pennsylvania
and New
Transportation PfcL
Jersey
Municipal Bonds
Transportation 3-6s 2039
Phila. Suburban Water
Com.
Dolphin & Co.
Incorporated
E. H. Rollins & Sons
contracts
Transmission
cubic feet of gas daily to be
Request
Phila.
.Bought—Sold—Quoted
signed
delivered via Big and
Com.
Hotel Keystone
Phila.
by prospectus
has
Texas Eastern
Corp. for purchase up to 125,000,-
Phila. Warwick Com.
Roberts & Mander Common
*
with
,
Ben Franklin Hotel
PENNSYLVANIA LEGAL
Harshaw Chem. Co. Common
*
Pittsburgh
originally char¬
tered in 1812 as a life insurance
company," William Fulton Kurtz,
President, explained. "It discon¬
tinued its life and annuity busi"Our firm was
Phila. Elec. Co. Common
*Nor. Ind. Pub. Serv. Com.
77.;'
Trusts.
EQUIPMENT CERTIFICATES
Phila. 2
Teletype
Telephone
RIttenhouse
Valuation and Appraisal
120
BROADWAY
NEW YORK 5, N. Y.
REctor 2-6528-29
Lancaster
Scranton
Samuel K. Phillips & Co.
Members
Philadelphia
Packard BIdg.,
Teletype
PH
375
Stock
Exchange
Philadelphia 2
"
N. Y. Phone
COrtlandt 7-6814
Fidelity
t
Philadelphia Trust Building
PHILADELPHIA 9
Telephones:
.
Philadelphia-—PEnnypacker
New
Bell
:X
5-4646
York—HAnover 2-9369
System
Teletype—PH
299
Industrial Price and Production
Policies Need Revision |!
Research Director, Textile
tabor
and publicists have
cated- that
-
'
Tne- most
pressing issue before the nation is industrial-pricing
and production
policies.- Labor issues: have been dramatized by ind ustr-i a 1 -
ists and publicists, w h cm
-
<&-
....
~
f'r
attention
>
tp> an^>
practices.: But .j
the c r,u c ia 1-%
t
e
e r
of
the ;•?
economic -fu-T:
ture
the;
and
character of
omic
v
in
this
to
be
the
realization
employment; if they
annual
Board of Governors,
and, Wallace H.
Fulton, Executive
Director, of NASD,? were the
for
cipal speakers. James B. Lemon,
,
industrial
and
*
\
*
-
improved
lleder J. t. Kinball
CHICAGO, ; ILL.
ihtfoduced
La~
and
of educational programs
'/ Y ^
•
Mr;- Fulton
discussed
adminisr-
ate<
was
anxious* ta
he bf. assistance arid service, to
t
Street, ^announce
-
a
¥
formerly Manager of the
Trading
■.i"
re¬
f-v.'*
>
'
ciatedi with; Merrill Lynclxr
tte
*
Fenner &
'
1
Pierce|
'i
t{
,
-i—
t
.....
^as-y;:
?
%
of
full
assure stable
120,000 Shares
a dynamic
expanding econ¬
where price and production
policies promote full employment
omy
at ever rising living
standards.
Industry's conduct must support
Michigan Gas and Electric Company
such programs.
employment and make the
(Continued
on
43)
page
Common Stock
Says "Over-the-Coiintei" Market
Is
($10
par
Value)
Misnomer
a
R". Victor
Mosley, President of National Security Traders Associa¬
tion, suggests a prize be given for a more
appropriate name.
Points out ''off exchange"
trading far exceeds in volunte and im-..
•
portance transactions
on
the exchanges.
$17.75
per
Share
A
,
.
Price
-
Speaking at a dinner sponsored by the Cleveland Security
Traders Association, in
Cleveland, O., on March 28, R. Victory Mosley,
of
Philadel¬
phia,
Presi¬
dent
of ^the
National
Se¬
-
000 and
in an off
exchange
deal - $200,000,000
of
American Telephone & Telegraph
;
curity Traders
debentures
Association,
form
the
per¬
the
-
of
Coun¬
R. V.
ter-Market" in
which
Mr.
Mosley
$500
ciation
security traders operate. In indi¬
cating the relative
volume
of
in
the
unlisted
stated
that
market
in
"National
business
field
done
all
on
stock
ex¬
changes approximated $1,200,000,-
This advertisement
!.
;
j
...
•
neither
an
be
Security
the
America
given
by
Traders
one
'
'
■f»Vl
I
«
J
April 2,
%
,
'.
-
V
t,
"v-i,/
1947
V T
...
in
the
This
Asso¬
suggesting
Securities
better
of
Market"
designation
operations
advertisement
sale
a
of
for
is
not
and
is
under
no
to sell nor a solicitation of an
offer to buy
offering is made only by the Prospectus.
any
circumstances
to
be
construed
as
an
offering of this Stock for
solicitation
of an offer to buy any of such .Stock. The offering is made only by
The Prospectus does not constitute an offer by any dealer to seu this
Stock in any State to any person to whom it is unlawful for such dealer to.,,:
t
as
or
the
a
Prospectus.
make
such
offer in
such State.
:
....
as
NOT A NEW ISSUE
the
security
54,905 Shares
traders.
offer
The
Bates Manufacturing
of these securities
Company
Common Stock
! •'
it;
,,
is
'.<
•
should
to
1946
much
.
North
Cohu & Torrey
Company, Inc.
more
appropriate name for the
business to replace Over-CounterMarket.
He suggested the term
the total market value of the bond
I
of
Haupt & Co;
was founded
He suggested that a prize
National
Mosley
these
business
Burr &
tbb oldest
security
Bank
Ira
•
'
of
in 1781.
name
"Over
•}:
Co.
(Incorporated)
Philadelphia which
despised
the
Otis
a
brokerage, and
mentioned among others a stock
issue by passengers on the
May¬
flower and dealings in stock of
form and said
he
*•
"cxchfihllb"' jfrkaffijl.
curi ties
s e
within
Mr, Mosley, pointed out that "off
¬
markets
sold
;;!
r'-f-
portant func¬
tion the "trad¬
in
were
few hours.
called
attentiOhHo the im
ers"
Copies of the Prospectus may be obtained from the undersigned.
few days ago
a
25,000 Shares
j.; •
($10 Par Value)
1Gardner-Denver Company
!
Price $29.25 per share
Cumulative Preferred Stock, 4% Series
i*'
;.?:V
>
•
($100 Par Value)
-
-
a
y
Copies of the Prospectus
(Ptu. accrued dividend, W
•■
as
Price $100 per share
:
.#>■
in,
from due of iaeoe
to
may
mav be obtained in any State only from such dealers participating in this issue
legally offer this stock under the Securities Laws of such State. Bv,;.,,*
■
^
A. G. Becker & Coe
'NA.:.*'
April /, 1947
•••
'
P
E. H. Rollins & Sons
*:
•>.
:r'-
*
dete of delivery)
v.'-:^ V ..... i ... /"
.
x: , . ,
I .7
•.
The Prospectus may be obtained in any State from such
of the Underwriters, including the
-i
undersigned, as may lawfully distribute the Prospectus in such State.> r
'
y-'.
"jf;
■
y.'fn-::--: "i
.Vi'fl'r'l,
.
■YM-li* Y*
A-
•-'i;.
Incorporated
;
^;
'
•
Baker, Weeks & Harden: r H. M. Byllesby and Company 7 Stroud & Company
-I'.-:*;!■ J-'u
*.
>
A
i
:>(■
.
■
>■-
■
;
incorporated
April 2, 1947
j
-V.
,.
1
■
J
Incorporated
-
•
••
vlt Vvbvi'iV'i
.
■
of
Beane..,r.^••;i1'
realized along lines consistent
with
Mu-|
Departments
This announcement.
appears as a matter of-.record only and is under no cirtmmstances to he construed
'•
ari offeriny of these securiiies for
sale, or as an offer to buy, or as a solicitation/of an offer
buy, any of such securities.
The offering is made only by the Prospectus.
:
the
Municipal Bond De¬
^^:^hstrict {1^! GhieaSP;- offic^ of Weeden ^
the,- Executive Co. an^fjha?: re^fl^-bppiL
33?^
Committees „rand-
con¬
Salle
opening of
nicipal
Office of NASD:
| Mrj 'Boyntohi report^! joit
m e r,
partment under the, direction of
;'v •■.; ' ,T V; Jk Austin. Kimball. ; Mr. Kimball
r
tion,^ -emphagizing
the
R e
Mitchell & Reitzel, Inc.,. 208 South
Johnston, Lemon & Co., Wash- •trative
|ngtbnr Chairrrianof District. Com-
;
;
people entering the securities
business.
prin¬
bf
toward:
use
be helpful.
Labor union demands represent
the people's aspirations. These can
country will
Solomon Barkin
be the type of
price and production policies in¬
dustry will follow. If they con¬
tribute
efforts
wider
the
could
:
relations prob¬
lem
attitudes
lations. *'
industrial
our
among
both - consumers
and. producers^ in continued; ex¬
penditure- -and * production; they
;ean supply the basis .for- a1 de-.
finite optimistic program of econ¬
mfe.i
nant
of.
a
Renter, Mitchell Dept.. ;
become registered and during the
so-oallad Waiting *perlQidv,,: * He
also said that NASD is consider¬
ing the advisability of supporting
ever;:
dence"
t-ry's^owiia
d
man
puttee, No.—ii,
risingi<stan(Jarci - of- speakers. - *K
iisdng^;if^' they i inspire- Confi¬
?
indiis-*
o m
—
apnual wage a reality -even though
not-, a- contractual obligation f if
thby mbderate ^thfc cyclical {bqpmfc
andbusts;
if "they contribute
-
sought tadi-r.
vert
—;
personnel
of securities after thev have
sues
that the Associa-j
position to do so,<
members in their
now
in
is
offices for. discussion of problems
in which the advice of trained
Mr. Boynton indi¬
the - NASD effort is
directed toward obtaining
changes in the Act'which will
tended a
meeting in .Richmond, permit -more *
prompt, wider; and
Va., March 26, sponsored by Rich¬
complete information on new is¬
.
-
-
proximately 75 representatives of
being
iVirginia
securities
dealers
at¬
;
-
,
tion
favors calls upon
tion 5 thereof.
-WASHINGTON, March 31—Ap¬
draniatized issuesto divert atteetion
from\indu$^
takes*.-Holds .recent and current
iprjcevand. production - policies: \ mond members of the National
gravely threaten our economy.:: Recommends
Association of- Securities Dealers
-following remedial'
(1) fostering of.topological advances; (2) ever-rising ' through Robert P. Martin^ of Dav¬
enport & Co., member, of District
wage scale; (3) opening of
industry'sprice and production policies —
to pnblic
scrutiny; and (4} price rebates in case of higher-than?bert F; Boynton, of H. F.
Boynton
& Co., Inc., New York.
anticipated returns,
V : '{p^-"'ir
City, Chair¬
4
proposals looking
particularly Sec¬
I
con«>
on
toward amendment of the Securi¬
ties Act of 1933,
Workers Union of America
spokesmancharge»industrialists
Governors,
and its staff
By SOLOMON BARKIN
/
,
ferences that had been held within
membership. He advised the Vir-;
the business and with the Securi-rginia dealers that the-Board of
ties
and
Exchange Commission
Richmond NASD
:
i,
5
Incorporated
.
,
'
' I
.,••.•7
.
:
/
'
»
14
they can do any harm at all, are
being grossly exaggerated. After
all, they say, the chief reason why
plans for new construction are be¬
ing rushed is that demand for of¬
fice space is so very great.
The bears predict that the time
is not far when in the financial
Despite the waves of optimism which sweep over the market in
real estate securities with almost clock-like regularity and consis¬
district at least, some of
tency, many investors persist in remaining bearish on the long-range
trends in real estate, insisting, as it were, there are dark clouds which
exist behind the silver lining.
With
recession, it is not surprising that
real estate should be infected with
investors
probably
are
slightest
the
to
ultra-sensitive
changes in the financial weather
and for that reason are undoubt¬
exaggerate things.
edly prone to
When business
is very obviously
structures
will
flock
to
the
new
buildings, they say. Vacancies will
thus appear and increase in the
older structures and earnings on
of gloom.
the
older
the more pessimistic
investors are convinced that the
not
all
of
Some
bond
better
either
or
now
anyhow are
recently have been
issues
to
By ELLIOTT V. BELL*
Superintendent of Banks, New York State
expenses,
properties anyhow, if
estate, v/ill have a
real
the small
out of
warns
go
and is driving prospective purchasers out of
market. Urges caution in appraisals and conservation in real estate
financing as a factor in preserving the whole economy.
including the
of rent.
There may in¬
signs of contraction in
business all around, including the
securities business where volume
als make bad loans;
distress.
The
trading today admittedly is not
what
it
was,
but nevertheless
small firms are not closing their
of
is
pears,
those
'
on
in the future,
all
are
was
time
the bullish side.
Many market analysts feel that
prices generally may drop in the
near future but that they will not
Anyhow,
the business environment in
country,
as
in the whole
this
world, will become more cheerful.
It
is the general economic
en¬
vironment which determines val¬
ues,
they
At the moment,
say.
a
fact
as
a
when
fear.
an
Ji
or as a solicitation
The offer is made only
offer to buy,
own
We
nounced
flation
V. Bell
sound
grow¬
17 years
and
of deficit financing. Real
estate is
is today
f
April 2, 1947
danger of an inflationary
real estate that could
In the face of the current post¬
war
much
is
there
inflation
ap¬
a general setback
later this year. Most
of
prehension
business
predict
recession,
a
shouting that it sees trouble
It is
simple, historic fact that
price inflations in the
a
wartime
past have invariably reached their
peak within iwo years after the
shooting stops. The great question
is whether the normal primary
expecting, is going to be short
and mild
Now
long and severe.
or
covery
such
of
a
would be a major expan¬
construction industry.
sion in the
construction
The
mally
43^% Cumulative Convertible
induatry
employs
any
other
nor¬
workers
industry.
more
Broadway, New York
City. Mr. Sitkoff has been a part¬
ner in Lambuth & Co. and prior
single
higher average wages than
any industry save anthracite coal
mining. It can assert a profound
influence upon the general level
thereto
of economic activities.
Morris
than
Sitkoff
It pays
Preferred Shares of Beneficial Interest
fices at 42
Par Value $100 Per Share
was
with James D. Cleland
& Co.
It
think,
I
is,
share
should have
we
homes
Copies of the Prospectus may be obtained from any of the several under¬
writers only in States in which such underwriters are
qualified to act as
dealers in securities and in which such Prospectus
may
REAL ESTATE
legally be distributed.
SECURITIES
★
■'
★
Members New York Stock
Goldman, Sachs & Co.
Exchange
Members New York Curb Exchange
W. C.
Ripley & Co.
AO EXCHANGE PL., N .Y.
Langley & Co.
Incorporated
Bell Teletype NY
J/lcniH Lynch, Pierce, Fenner & Beane
JDoffii & Burr
Incorporated
"
,
1-953
F. S. Moseley & Co.
is
im¬
portant to all the industries that
supply building materials. It is
to the banks and in¬
companies
and
other
thrift institutions that need good
important
surance
f.
E.
E. H. Rollins & Sons
Newton & Co.
G. H. Walker & Co.
Incorporated
(Incorporated)
*
.
;
^
Schoellkopf, Hutton & Pomeroy, Inc.
Hayden, Stone & Co.
V
J
'
California & New York
Whiting, Weeks & Stubbs
Cooley & Company
Real Estate Issues
Pacific Company of California
IDias. W. Scranton & Co.
William R. Staats Co.
JRt&ce, Whiteside, Warren & Sears
Perrin, West & Winslow, Inc.
-
--j-
•
a
savings,
a
large
an
increased the demand for housing
satisfying that
and the means for
The construction indus¬
demand.
try has before it at this moment
tremendous market,
good for
a
to come. The danger
years
many
industry
construction
is
that
is
pricing itself out of that mar¬
the
F. S. Smithers & Co.
Wainwrigbt & Co.
Yarnall & Co.
I think, are fairly
facts. The con¬
standard six-
struction costs of a
,
house
room
are
today about 70%
figures on a national
large city in this
State construction costs rose 22%
over
prewar
average. In
one
above
last year and are now 83%
to 1939. Ac¬
authority a stand¬
the average for 1935
cording to
one
in
built
house
six-room
ard
Broadway
than
tically $13,000 today, an increase'
of 190%. The rise in cost since
to this
according
1939,
measure,
has been 120%.
Office
The
of
estimates
diter
cost of the
Housing
the
that
Expe¬
average
permanent hous¬
new
built this
ing units that will be
will be $7,200. I think most
of us know that it has not been
year
possible, in this neighborhood, to
buy much of a house for $7,200
lately. Yet how many people can
1961 WS '
Center 4s
A. M.
Hotel
1957 WS
afford to pay even
a
that much for
house?
to
some
careful
published in the Federal
According
studies
Reserve
Bulletin
last
summer,
family units in this
of the
70%
country had incomes of
on
page
$3,000 or
22)
George 4s
Bldg. 5>/2s
155
1950
1959 WS
Broadway
Hotel Common
&
Beaver St.
1956 WS
Tel.
BArclay
7-4880
»•
A]/2s WS
61
Par. Ctfs. CBI
Broadway Corp. Stock
79
Realty 5s
5s
1948 WS
1948 WS
Incorporated
150 Broadway
EXbrook 8515
Roosevelt
Amott,Baker & Co.
Montgomery St., San Francisco 4
-
1964
Roosevelt Hotel 5s
Westinghouse Bldg.
1963 WS
1955
Pittsburgh Hotels VTC
Wall
Greenfield 5s 1954
St.
Club 2s
York Athletic
New
Sherneth Corp. 5%s
1949
1410
J. S» Strauss & Co.
WS
4Vi|s 1954
& 41st St.
Brooklyn Fox 3s
a
city which cost less
$4,500 in 1933 costs prac¬
midwestern
(Continued
Broadway-New St. 3s
Lincoln
Tele. SF 61 & 62
great accumulation of
increase in marriages,
internal
migration of
people. All of these things greatly
incomes,
Appraisers, New York
Real Estate
Starkweather & Co.
Incorporated
ti
pansion in the field of construc¬
tion. There was a great rise in
Mr. Bell before the
7th Annual Appraisal Conference
of the New York State Society of
National Hotel Cuba 6s
pTow&iend, Dabney & Tyson
re-
OFFERINGS WANTED
Firm Trading Markets:
k
H. C.
itself
war
enforced the factors making for ex¬
City, March 28,1947.
if
fi F. Boynton & Co., Inc.
the
The
thirties.
Address by
Film
;
both longfavor ex¬
building field.
the ris¬
ing phase of a major construction
cycle which started in the mid
investment of
Broadway-Trinity PI. 4?Y2s 1969
Wems, Hall & Company
short-term,
in
pansion
It is important
savings.
.
Paine, Webber, Jackson & Curtis
It
own.
Hornblower & Weeks
....
i.
'■
,
fcee Higginson Corporation
Dlgby 4-4950
Stone & Webster Securities Corporation
Estabrook & Co.
all the GI's
brides who want
mortgages for the
★
SHASKAN & CO.
Eastman, Dillon & Co.
Harriman
their
of
people's
The First Boston Corporation
jptiyth & Co., Inc.
a
try. It is important to
and their young
(
important
very
sustained
revival of building in this coun¬
that
Plus accrued dividends
•
and
factors,
Most of you,
give backbone to a sustained re¬
(A Massachusetts Trust)
Price $103 per
Powerful
familiar with the
that could lift
recession and
thing
one
out
us
f'P
w
Expansion
Favoring
Faetors
ket.
| 'New England Gas and Electric
ji
Association
J
period of
expansion or
speculative
boom
and
World War II interrupted
Expansion Needed in
Construction Industry
*
of real estate a
and courage.
4
i
to
going
are
term
is
;
we
only result in a subsequent bust.
Clearly this is a time for caution
postwar reaction which everyone
77,625 Shares
a
bust.
in
boom
ahead.
4
another
especially inflated. There
ing out of a great world war
been
i
whether
have in the field
although they say it will be mild.
The stock market for months has
his
investment business with of-
to
upon
turn
degree
considerable
rests
ElHolt
in
question
that
and
ery,
in¬
—
itself
peace
the ability of our coun¬
try to achieve a sustained recov¬
in¬
flation
of
hope
very
rests upon
a
economists
or as
The
work.
in
across
the world.
ap¬
are
clear
shadows
their
cast
period of pro¬
in
of an offer to buy, any of such securities.
by means of the Prospectusi
W ISSUE
so
mpjetentt,
praisal
Morris T. Sitkoff will open
offering of these securities for sale,
people of all the nations ail over
earth, because inflation and
deflation
in
the
United
States
upon
oo
all the other
the
de¬
pended
Portuguese
the
the Dutch, and
and
a
much
honest
until
rope,
never
and
Armenians
to¬
day, yet there
say
.
drop to prewar levels.
portant
peculiarly
difficult
entire
our
That means it is im¬
to the Greeks and the
economy.
values
estate
doers, nor is anything heard, yet
at least, about possible mergers,
and the fears of the bears, it ap¬
of
welfare
the
for
ap¬
praisal of real
strong tendency to fall, they rea¬ however, actual deterioration of
son.
It could happen that the new the business
environment, they
buildings would prosper but de¬ hold, would seem to be not so
as an
,
real estate loan there is an appraisal.
Bad apprais¬
bad loans make for ultimate losses, deflation and
Behind every
be
Open Own Offices
circumstances to be construed
[
a
ersf ability to meet,
Morris Sitkoff Will
no
j
achieved only by
of expansion
expense
deed
at their peaks in values and if the pression would certainly fall upon much
the old, they think.
prices at which they are selling
Those holding the opposite view
or
recently have
been selling
change at all, they can only fall. feel that estimates of the harm
What they are really saying is the that the new buildings can do, if
This is under
sound period
in real estate field, New York Banking Superintendent
construction costs have advanced beyond bulk of home seek-
Holding sustained recovery can be
the great catastrophe of a
general price decline actually does
materialize, they say, it can be
construction of new modern office only speculation to say that a de¬
buildings in the so-called more pression is inevitable. Some wellr
desirable locations.
According to informed
people, however, are
them, the new buildings can only taking the view that as soon as
hurt the old.
Tenants in existing order can replace chaos in Eu¬
£ood, their optimism knows no
bounds; let the slightest ill wind
blow and they are in the depths
f
cut down
same
group,
decide
will
Today's Shaky Real Estate Maiket
business, merge with some other
houses, or double up in order to
much talk about approaching
so
pessimism that can be<£
found in so many sections of the outlook
for some properties at
least has been and is still so good
business environment generally.
When
security prices
plunge that bonds upon them have re¬
downward with the violence which covered in value to a considerable
they exhibited last September and, extent, in some cases almost to
Their pessimism probably
for that matter, to some extent par.
since then, however, those bullish stems out of the fact that if they
were to purchase such securities
on real estate contend it is safe to
now they would have to wait un¬
say at least that the bears may
have overdone the thing just a til the bonds actually mature be¬
realizing any substantial
little. At the end of every major fore
decline in security values—that profit from their investment or if
Is, after investors have had the they own such bonds and were to
chance to get their second wind, sell them, they would have cer¬
to re-examine the situation with tain taxes to think about.
The bears can see nothing en¬
calmer eyes — bond and stock
in the reports
that
prices do have the stubborn ten¬ couraging
dency to right themselves.
As a plans are being pushed for the
the
firms
Thursday, April 3, 1947j
CHRONICLE
THE COMMERCIAL & FINANCIAL
(1/94)
New York
7. N. Y.
Teletype NY 1-588
THE COMMERCIAL & FINANCIAL
CHRONICLE
Should Have
ABBA
P.
:
LERNER
Professor of Economics, New
School for
Social
Prof. Lerner denies it is unsound for
government to get into
and contends that "as
long as we owe it to ourselves" it is
announce
become
Defends
need to balance
budgets. Favors so-called "Functional Finance," which
and borrowing to maintain a level of
prosperity.
taxes
uses
The common
can
man
concern about
balancing the budget of the Federal
be expressed by fouy simple propositions:
(a)
It is unsound for the government to
spend
collects in taxes and thus to get into debt,
t
(b) This could not be helped
during the war, but
(c) Now that the war is over there can be
no
excuse
■
still further into
(d)
debt
case we
These maxims of "sound
finance"
or as
sound
as
they
than
the
na¬
into
This
is
because
they
fear
-
of
r
more
of record only and is tinder no circumstances to be construed as an
offering of1
offer to buy, or as a solicitation of an offer to buyy any of such securities,
offering is made only by the Prospectus.
a matter
as an
•
,
na¬
private debt
Food
inter¬
or
dan^Abba P.
Lerner
a
which
government
a
is heading for the
money
of trouble
"We Owe It to
.
city
an escaped
man-eating tiger is
mpch less serious danger than
The
a
as
indi¬
an
2V2% Sinking Fund Debentures, due March
15,1962
primary
Price 100%%
and accrued Interest from March
15, 1947
Ourselves"
difference 5 be¬
tween private debt and
nationa
debt i$ that toe owe
the national
debt to ourselves. The nation
as a
whole is not impoverished
a
propensity to treat tabby cats as
if they were tigers—to be
fright¬
ened by «very cat in the
street:
(Continued
on
page
by
47)
70,000 Shares
na-
3V4% Cumulative Convertible Preferred Stock
(Par value $100
Federal Reserve Board Clarifies
Reasons
For Backing Bank-Loan Bill
4
Pending legislation
dustrial
loan
,
share)
j
Price $101 per Share '
and accrued dividends from March
expanded inventories and
%
15, 1947
re-
ceivables resulting from rise in business
volume, maintains partialguarantee technique has been
proved sound through past ex¬
perience in both
per
would end government
appropriations for in¬
Board contends need arises
operations.
Reserve
from great increase in
prices, and
-
\
Machinery Corporation
his income and
getting into debt
But the national debt is not
the
same kind of animal.
a modern
*
v
NEW ISSUES
impoverishes himself
by chronically spending more than
debt;
1
I ■'
:
The
vidual who
gerous than
wild beasts. In
•
as
kind
same
and false fears
-
thing
borrows
misunder¬
are more
s
forgetting about the automo¬
belief. that
standing of the
tional
attendance of 50 members.
This announcement
appears as
these securities
for sale, or
peace
Copies of the Prospectus
persons to whom the
and wartime.
WASHINGTON
The Bill to
provide assistance in financin.
small business
through established banking
channels, which was in"
troduced in the Senate Jan.
27 last under the
sponsorship of Senator
-Charles W. Tobey,
Republican of New
Hampshire, has been sum-marized and explained
by the Federal Reserve
Board which is
may
be obtained within
undersigned
may
any State from the undersigned only by
regularly distribute the Prospectus in such State.
—
-
recommending its adoption.
The pending bill would
repeal^
the
appropriation of about $139,--
000,000
available
under
existing
law for industrial loan
operations
the Reserve
of
Banks, and
gov¬
ernment
appropriations would no
longer be used for this purpose.
The bill
(S. 408) would also
re¬
peal section 13b of the Federal
•Reserve
Act, adopted in
1934,
which authorizes Federal
Reserve
Banks
to
industrial loans.
provisions of this sec-
Certain
*
make
-tion have proved
restrictive as
seriously to impair the ability of
the Federal Reserve Banks
to as-
-
sist in the
r
financing of business.
In lieu of section 13b, the new
-billwould add a paragraph to section
13
of the Federal
Reserve
Act authorizing Federal
Reserve
v
(3) The aggregate amount of al
guarantees
Banks to guarantee loans made
by
financing institutions to business
-enterprises on a much more effective basis than that
permitted
*
by present law.
While
the
Fed-
*
eral
Reserve
longer
have
direct
Banks
loans
wduld
would
authority
to
to
no
make
business,
they
be
authorized to guarantee
business loans subject to
regulaj tions prescribed by the Board of
Governors and to the
*
following
*
qualifications:
(1)
;
No
loan
'
have
a
years.
,
could
more
10
#
Federal
guarantee
could
than
*
(2) A
more
guaranteed
maturity of
*
could
not
exceed
the
combined
surplus of the 12 Fed¬
eral Reserve Banks.
(4) In order
ability of
smaller
amount
are
to insure the avail¬
guarantees
for loans to
This
announcement is not to
businesses, the aggregate
of
all
guarantees
individually
in
be construed
serve
offer to sell or as a solicitation of an offer to buy the securities herein
offering is made only by the prospectus.
as an
mentioned. The
which
excess,
of
$100,000 could not exceed 50% of
the combined
surplus of the Re
(5)
300,000 Shares
Banks.
Reserve
up
than, 90% of
to,
but
any loan.
Bank
not
The
utilize
out
Reserve
their
guarantees
Banks
funds
own
made
would
to
carry
under
the
bill.
Need
*
f
-
Mitchum, Tully & Co.
so
*
-
Kidder, Peabody & Co.
April 3, 1947.
——
A
for the
basic
Plymouth Rubber Company, Inc.
Common Stock
Legislation
for
need
small,
pendently owned business
prises is long-term funds.
$2 Par Value
inde
enter
Some
businesses need funds for mod
ernization of equipment and some
need
special labor-saving facil
ities in addition to other
require
ments. The need also arises
from
the great increase in
prices and
Price $13.50 per
greatly expanded volume of busi
ness
which
recent
years
suited
in
have
and
come
which
about
have
Copies of the prospectus
only in
in
states in
may
which they
share
be obtained from the undersigned
qualified to act as dealers in
legally be distributed.
are
securities and in which the prospectus may
re
much larger volume
receivable and of in
ventories. Because of these vari
ous
factors
many
a
of accounts
enterprises
whose financing needs have
or
dinarily been met through cur
rent borrowings now need
financ
ing on a longer-term basis.
(Continued
on
page
51)
F. Eberstadt
April 1,1947.
Picl
SECURITY TRADERS CLUB OF ST. LOUIS
The Security Traders Club of St. Louis
inaugurated a series
monthly luncheon meetings at the DeSoto
Hotel, March 26, with
service
wise
as
much
personal debt.' They come from
springs from a
fundamental
of
four yw$'
overseas.
based on the supposition that
government debt is the same kind
which
nature
from
The maxims of "sound finance"
false
a
unfortunately not
are
;urned
Engineering Corp.;
Muller, recently re-
are
derived
from
as
They
and Carl J.
bile traffic.
self.
are
possible in order
should need to borrow again.
are
attorneys, journalists and jurists.
tures taken at the meeting
appear elsewhere in the "Chronicle/
Grum¬
Aircraft
<$>-
•
tional debt it¬
-
soon
plausible and popular.
are
.dangerous
as
with
CLEVELAND SECURITY TRADERS
ASSOCIATION
Over 350 members and
guests attended the Eleventh Annuel
Dinner of the Cleveland
Security Traders Association on March 2CI
Among the guests were officers of Cleveland corporations and bankl
and some of the city's
leading
getting
^
war
credit in
our
for
it
debt, and
We should repay the
to restore
than
more
with the firm
Wallower, formerly
"Commonsense" Maxims
Government
investment
security de¬
partment: Halsey S.
Downer, for-'
merly associated with
Smith, Bar¬
ney & Co. for five
years; Joseph
O, Rutter formerly with E.
I. du
Pont de Nemours &
Co.; Richard
a
government
.
associated
in, the
debt,
not
NSTA Notes
Exchange,
that the following have
\
.
subtraction frcm national wealth or a national
burden.
further borrowing to pay debt interest and decries
Rutter
&
Co., v 20 Exchange
Place, New York City, members
of the New York
Stock
Research
1
Four Join Dept. of
fuller & Co., N. Y.
NogFear
Of National Debt
By
(1795)
&
Co. Inc.
E. W. Clucas
&
Co,
c:|
ai|
THE COMMERCIAL &
cubic
million
FINANCIAL CHRONICLE
feet
high heat
of
daily. This gas can, if
the experiments as a whole prove
successful and the process is eco¬
nomically feasible, be used direct¬
value gas
ly
fuel or further processed
octane gasoline and/or
as
to high
in¬
oil.
expected to
stem from this gasification is that
is would make possible the utili¬
zation of large reserves of low
the benefits
of
One
coal.
grade
no matter
experiments
in gasification of coal may be the
railroads are not going to lose
all, or even a major portion of,
their coal tonnage. The steel in¬
dustry, for one thing, would still
need a large tonnage of coal in its
operations no matter what is used
as fuel.
Also, there is no definite
obvious
is
It
that
how successful these
information at this early
to
date as
costs of the projected
the
op-'
although obviously
ex¬
erations
periments
on
the
hardly have
would
present scale
been under¬
good rea¬
taken unless there was
expect that the costs would
prohibitive.
All in all,
while there is no immediate threat
to the status of the coal roads,
son
not
to
be
gasification experiments have
progressed to a point where they
must
be
followed
very
closely I
they' must be given
considerable weight in arriving at
and
where
any
sound long term
program.
Province of Alberta
3j/2S,
1961-1980
Arden Farms
Common
&
Preferred
Pacific Airmotivc
investment
1
Thursday, April 3,
An Indictment of Soviet
1947
Policies
Volume
165
Number 4582
•
THE COMMERCIAL & FINANCIAL
CHRONICLE
(1797)
Bond Club of New York Announces
Stuart Wyeth Added
Plans for 1947 Annual Field
Plans
James
the
of
for
the
1947
Bond
Coggeshall, Jr.,
Bond
of
Club
Club
Field
of The First
New
York.
Day
announced by
Corporation, President
Boston
The
Day
outing
were
will
be
held
at
the
Sleepy Hollow Country Club, Scarborough, New York, on Friday,
June 6. This year's Field Day is the 23rd annual event of its kind,
having been revived last
year
after
a
wartime lapse.
New Branch for
Brady
To Staff of Dixon & Co.
PHILADELPHIA,
MacR.
ated
Wyeth has become associ¬
with
Chestnut
New
PA.—Stuart
Dixon
&
Co.,
Street, members of the
Stock Exchange as a
&
branch
office
Geo. Miles Joins
op¬
at
Gimbernat & Sellwood -1
Broadway, Saratoga Springs,
Y., under the management of
Paul F.
Gimbernat
&
Sellwood,
111
Broadway, New York City, mem¬
Hittinger.
bers of the New York
registered representative.
H. L Buchanan Partner
B.
L.
partnership in the New
Exchange firm of H.
Buchanan & Co., 120 Green¬
manager of the
Curb
wich Street.
active
as
ment
individual
an
some
of
thereto
Mr. Halden has been
Floor broker for
bond
Curb
time.
Ira
he
syndicate
Haupt &
was
department
Colket &
for
Wisher.
Emerson,
Clifton
A. Hipkins, Braun,
Co.; Marvin L. Levy,
Goldman, Sachs & CO.
Bos worth &
Indoor Sports—John
THE
W. Valen¬
tine,
Harris, Hall
man;
&
Co.,
Chair¬
Co., Inc.; Elwood B. Boynton,
F. Boynton & Co.; William B.-
H.
NATIONAL
Chappell, First Boston Corp.; Rob¬
ert G.
G.
Jas.
Coggeshall, Jr William G. Laemmel
|t
CHASE
Clarence W. Bartow, Drexel
&
H.
&
Dillon, Dean Witter & Co.;
Walker, Jr., G. H. Walker
OF THE
Co., Gerald B. West, Stone &
Securities Corp.
CITY
BANK
OF NEW YORK
Webster
&
Co., and Robert L. Hather, Jr.
Carnival & Side Show—Geo. K.
of the Chase National Bank.
An elaborate program of snorts
events and entertainment features
has
been
arranged for
the
Field
Day, according to Mr. Laemmel,
who
announced
the
of
the
appointment
committees to
following
direct the various activites;
Bawl
Street Journal—J.
Thors.
Emer¬
Kuhn, Loeb & Co.,
Chairman; John A. Straley, Hugh
W. Long & Co., Inc., Editor; Nor¬
man
P.
Smith, Merrill Lynch,
Pierce, Fenner & Beane, circula¬
tion manager; Walter F.
Blaine,
Goldman, Sachs & Co.; Joshua A.
Davis, Reynolds & Co.; Richard
de La Chapelle, Shields &
Co.;
son
L. Walter
gen
,&
'
Dempsey, B. J. Van InRobert W.
Fisher,
Co.;
Blyth & Co.. Inc.; Raymond D.
Stitzer, Equitable Securities Corp.;
Walter M. Thomas, Hornblower &
Weeks; C. Marshall
& Co., Inc.
Transportation—
Soft Ball—Wendell R.
Carlson, Halsey, Stuart
Chairman;
Harold
W.
Davis, Laird, Bissell & Meeds; El¬
mer F.
Dieckman. Glore, Forgan
&
Co.; Edwin H. Hemingway,
Harriman Ripley & Co.; Conrad
H. Liebenfrost,
Stern, Lauer &
Co.; Lincoln J. Patton, Halsey,
Stuart & Co.; James J. Sullivan,
Blair & Co., Inc.; H. Edward Vollmers, Morgan Stanley & Co.
Steel,
Lazard
D.
&
Freres
&
Trophies
Chairman; F. Seymour Barr, Barr
Co., Inc.; Thomas T. Cox-
Hallgarten & Co.; Francis P.
Gallagher, Kidder, Peabody &
Co.; W. Murray Lee, Reynolds &
Co.; Arthur W. McGrath, First
National
Bank
Gardiner
H.
of
New
Rome,
Stone
Horseshoe
Meyer & Co. Celebrates
105th Anniversary
Fenner & Beane.
transactions
.
.
116,207,254.97
.
.
.
175,204,016.86
1,251,548,704.91
11,341,482.75
Mortgages
Customers'
7,560,513.37
Acceptance Liability
9,659,573.65
....
Stock of Federal Reserve Bank
7,950,000.00
Banking Houses
32,182,818.50
Other Assets
y
4,418,706.76
$4,860,581,123.11
Capital Funds:
Capital Stock.
.
$111,000,000.00
.
.
Surplus....
154,000,000.00
Undivided Profits
were
in
gold,
49,048,847.23
$
Payable May 1, 1947
314,048,847.23
.
2,960,000.00
....
13,035,153.79
........
4,488,156,083.76
Reserve for
Taxes, Interest,
.
.
Contingencies
Reserve for
.
Deposits
.
...
16,296,079.05
etc.
Acceptances Outstanding $ 14,629,451.44
Less Amount in Portfolio
Liability
and
as
Endorser
on
4,217,045.15
10,412,406.29
Acceptances
Foreign Bills
2,860,802.44
Other Liabilities
12,811,750.55
$4,860,581,123.11'
cur¬
rency and bank notes.' Edward E.
F.
Moyer was admitted to partner¬
ship shortly after the business
&
Co.,
Chairman; Harry C. Clifford, Kid¬
der, Peabody & Co.; Robert H.
started.
Moyer
.Craft, Guaranty Trust Co.; W. H.
Reginal Jarvis, First Boston Corp.;
The
&
firm
Co.
in
became
1906.
A
Fox
year
United States Government and other securities carried
to secure
U. S. Government War Loan
funds and
trust
at
$401,086,340.00
Co.
of New York; Robert
Lev/is, Esta¬
Co.; William R. Rovensky,
Hornblower & Weeks; John M.
Young, Morgan Stanley & Co.
Since 1928 the firm has been
at
1500
Walnut
Street
located
brook &
Present partners
are:
Clarence L
Moyer, Henry C. Fox, Jr., Edward
T.
•
j
Moyer and Clarence L.
er,
Jr.
.
Moy-
are
pledged
Deposits of $149,221,289.01 and other public
deposits, and for other
purposes as
required
later, John T. Fox retired and the
name
was
changed to Moyer &
Grant Keehn, First National Bank
.
.
Accrued Interest Receivable
J.
sen
Hunt, White, Weld & Co.;
Charles A. Pope, Barr Bros. & Co;
Co.:
Golf—William H. Morton, W. H.
Morton & Co., Inc., Chairman;
.
r
—
Estabrook
.
Municipal Securities
2,140,178,183.69
•
Other Securities
Dividend
Pitching—Alfred
Ross, Dick & Merle-Smith,.Chair¬
man; Herbert E. Anderson, Jr.;
Green, Ellis & Anderson; E. Jan-
Inc.
ExchangeCharles
....
&
Webster Securities Corp.
James
A.
Lyles,
PHILADELPHIA, PA. —Last
Corp., Chairman; Al¬ month marked the 105th anniver¬
bert F. Donohue, Kidder, Peabody
sary of Moyer & Co., which be¬
& Co.; Dudley N. Schoales, Mor¬ gan business at 11 S. Third Street
gan
Stanley & Co.; Richard A. in 1842 under the name of John
Woods,
Merrill
Lynch,
Pierce. E. Fox & Co. The firm's early
Stock
Obligations
York;
First Boston
Hazel wood,
State and
$1,104,329,867.65
on,
Topping, Braun, BosCo.; Darnall Wallace,
Coffin & Burr,
U. S. Government
LIABILITIES
Erickscn,
Corp.,
Bros. &
Russell, Glore,
Forgan & Co., Chairman; Gordon
B. Duval, Guaranty Trust
Co.; E.
Norman Peterson, Equitable Se¬
curities Corp.; R. W. Pres«nHch
Jr., It. W. Pressprich & C5.; Arthur
jr. Searing, Drexel & Co.; W alter
James
Bar¬
Stone & Webster Securities
Dinner—P. Scott
worth
Cash and Due from Banks
Co.; Richard N. Rand, B. J. Van
Ingen & Co.; Guy O. Reynolds,
Bartow, Leeds & Co.
J. Howard
H.
Leeds,
RESOURCES
&
Dillon & Co.
Co.,
D.
National Bank & Trust Co.; Fran¬
cis D. Bartow, Jr., Bartow, Leeds
Buttenwieser, Kuhn, Loeb &
Co.; Lloyd S. Gilmour, Eastman,
&
Shields
& Co., Chairman; Charles L. Eergmann,
R. W. Pressprich & Co.;
David
W.
Lovell, Laurence M.
Marks & Co.; Eugene W. Scar¬
borough, Central Republic Co.
Music—.Donald
STATEMENT OF CONDITION, MARCH 31, 1947
Loans, Discounts and Bankers' Acceptances
f.
Pool—Emmett Lawshe,
tow,
Leeds
&
Co.,
Chairman;
Craig S. Bartlett, Central Hanover
J.
&
CO.
Wood, Blair
Publicity—William H. Long, Jr.,
Doremus & Co., Chairman; Eugene
P. Barry, Shields & Co.; Benjamin
Attendance
Coggeshall, Schoellkopf, Hutton &
Pomeroy, Chairman; Paul G. Dev¬
lin, Blyth & Co., Inc.; Allan C.
Eustis, Jr., Spencer Trask & Co.;
Ransom F. Hodges, First Boston
Corp.;
George Holzman,
Chase
National Bank; William P. King,
Harris, Hall & Co.; W. LaudBrown, Bankers Trust Co.; Edward
H. Nelson, Kidder, Peabody &
Co.;
Julius C. Ransom, White, Weld &
Co.; George H. Reeves, Chase Na¬
tional Bank; Arthur C.
Turner,
New York Hanseatic Corp.; Wal¬
ter W. Wilson, Morgan
Stanley &
Member Federal Deposit
Insurance Corporation
or
permitted by law.
depart-1
Co.
manager
Morgan Stanley & Co.; Chairman;
Amyas Ames, Kidder, Peabody &
Co.;
Ex¬
formerly!
mitted to
York
Stock
change, announce that George H.
Miles has become associated
with!
the firm. Mr. Miles was
Charles E. Halden has been ad¬
,
Trust
Tennis—Sumner
the
announce
York
Barysh Back at Desk
Co., has been John J. Clapp, Jr., R. W. Press¬
Max
named chairman of the Field Day prich &
Barysh, of Ernest & Co.,
CO.; Herbert S. Hall, Mor¬
Committee. He will be assisted by gan Stanley & Co.; Edward D. Mc- 120 Broadway, New York
City,
has returned from a
lour vice-chairmen—Jo M. French Grew, Northern Trust
month's trip
Co.; William
to Florida.
of Blyth & Co, Inc.; Ernest J. Alt- M.
Rex, Clark, Dodge & Co.;
gelt of Harris Trust & Savings Sanders Shanks, Jr., The Bond
Bank; C. Russell Lea of Reynolds Buyer; .Charles
J.
Waldmann,
Kean, Taylor & Co.; Henry P.
Warren, Jr., W. C. Langley & Co.
Bank
510
N'.
1411
William G. Laemmel of Chemi-3
cal
Brady & Co.
ening of their
17<
Prior-
of
the i
Penington,!
THE
18
COMMERCIAL & FINANCIAL
Thursday, April 3, 1947
CHRONICLE
(1798)
mutual funds to doctors and
professional men who lack
by
other
time
the
or
ability
to
"Our
properly
supervise their investments. Ac¬
cording to Dr. Morris Fishbein.
the editor of the publication, this
aroused widespread
reader interest, and the demand
for reprints on the part of dealers
in mutual fund shares has been
of record breaking proportions. To
date, 106,000 reprints have been
sold
as
compared
with
the
has
article
By
HENRY HUNT
"A Burnt
Child"
of Liberty Bonds to
citizens learned foi
20s, hundreds
stocks for
result of the sale
of thousands of American
World War I, as a
During
hundreds
* the first time what a bond was.
During the prosperous
"Journal's" total circulation" of
1S thniiLnd* Of neoole in all walks of life bought common
117,000.
the first time.
The market crash in 1929 turned
Notes
losses and the early '30s taught this new class of
r
good .stocks can sell at incredibly
Wellington
Fund has a new
<!\
• /% low prices when a real depression
booklet called, "Solving An In¬
sets in.
•the public
their profits into
investors thai. even
i
_
ing the middle
attracted
large
EQUIPMENT
SHARES
of
Group Securities, inc.
By JOHN T.
J
CHIPPENDALE, JR.
influ-»
when important J
developments are to take place. . .;. Expected changes in short-termrates, have caused prices to move down, with volume receding, as
dealers and investors await the much talked about reversal of trend
in interest rates.
Until there is clarification of what will take •
place and the financial community has had an opportunity to evalu¬
ate it, the market is likely to be pretty much of a defensive affair....
Although there has been good investment buying from sav¬
ings banks and insurance companies, very little is likely to be
'
done by these institutions now, in face of the talk that bills may
go to %% or %%, certificates to 1Vh% or 1*4% with five-year
.-.aturK_ea between 1.75% and 1.85%, and the longest eligible
ZV2% cn a 2.25% basis. . .;.
/
Although there will be no change in the long-term interest rate!
of 2%%, there could still be a sizable adjustment in market prices of?
the longer-term Treasuries, particularly the eligibles,
without ap-j
proaching the issue price of these securities. ... This would not*
entail any increase in interest cost to the government. . . .
The
markets are now under the
securities
government
uncertainty which is always present
of that
ence
.
.
,
dur¬ vestment Problem."
Keystone Funds has issued s
'30's undoubtedly
sums of money pamphlet entitled "Ten Securitiej
from the same investors who al¬ That Satisfy a Wide Variety of
most lost their shirts in the 1929- Investment Requirements."
32 debacle
Calvin Bullock's "Perspective"
During 1937-38, as a_ result of concludes:
"In summary, it ap¬
unexpected economic deteriora¬ pears that the present period is
DEFROSTING SEEN IMMINENT
tion, these common stockholders stronger in its financial aspects
Whether there will be such an adjustment in prices or whether
were
"burnt" again, while in than at the end of World War I
the market has already quite fully discounted impending interest;
early* 1942 when Russian armies and that the credit collapse of
were
on
the ropes, the attitude that period should not be repeat¬ rate changes will be known only in the future. . . . The opinion is
of
these
investors
toward the ed. The other major economic in¬ •practically unanimous now among money market experts, that there
will be a defrosting of short-term interest rates in the near future.
stock market reached the nadir dices, however, appear to be fol¬
It could hapen in a few days or a few weeks. ...
of despair.
Again in 1946, after lowing basically similar patterns
four years of rising stock prices, although differing in degree. The
In some quarters the belief is held that the whole procedure
the
market "fell out of
bed," demand for goods, particularly
has been agreed upon except for the tiftie when it will be an- catching most investors fully in¬ capital goods, is now much greater
pounced, which will be sometime in the next two weeks. . . .
vested as usual.
than in the earlier period, but a
The reason given for the change in interest rates is not the trend
Ten months after the beginning lesser
degree of price inflation in purchases of long government securities or the shift from shorts
of the 1946 decline, we find that has taken place—at least to date.
io longs, but the inflationary trend of commodity prices and business
business conditions, as measured Furthermore, the stock market is
loans.
In order to halt this inflationary trend and to get back
by leading indices, are better than more cautious in its appraisal of some semblance of control over the creation of reserves, it seems as
they were at the top of the 1946 present earnings and its realiza¬
though the Central Banks, along with the other monetary authorities
market.
However, we also find tion of the prospects of a read¬
have decided to unpeg short-term rates. . . .
that, despite the lower level of justment in prices and profits.
TOUGH SPOT
I
stock prices, most investors are Under such circumstances it would
now strictly out of the market and
The position of not being able to stop or retard the creation of
appear that the readjustment that
•eserves, by member banks, is not a very enviable one to be in. . . .
many financial experts are pre¬ may lie ahead will likely be of a
dicting
still lower prices for lesser severity and intensity than This is the spot the Central Banks are in now. . . . This predicament
equities.
occurred after the First World that the Federal Reserve Banks find themselves in is because there
Could it be. that the new gen¬ War."
is no flexibility in the buying rates for bills and certificates that are
eration of investors as well as the
Distributors Group has avail¬ offered them by the member banks. . ,.
same generation of financial "ex^
With a set buying rate at Federal for bills and certificates
able a new folder title "Mutual
perts" are merely proving the old Funds—What They Are and What
member batiks are in a position to create reserves, and there is
adage, "A burnt child fears the
You
As
An Investor Gain by
nothing much that the Central Banks can do about it. . . . With
fire"? Certainly no previous bus¬
Their Use."
ample reserves, loans are being made or higher yielding Treas¬
iness recession has ever been so
A new folder on Railroad Series
uries are bought, with the uptrend in commercial borrowings by
widely advertised as the one now
far the more important at this time.
. . Too many marginal loans
has been issued by Hugh W. Long.
predicted to be in the making. As
are being made.
It contains the following interest¬
market recovery
The stock
RAILROAD
"
Reporter on
...
a prospectus
on
request
Investment dealer or
from your
Distributors Group, Incorporated
63 Wall Street,
New York 5, N.
Y.
...
II
.,....
vr
.
.Ttwpttifdp vpbn request troth
C; four investment 4eoler,ot from
^
National
securities &
research
corporation
tio broadway, new york 5,
n. y.
.
...
Lurie recently wrote so
Mr. S. B.
ing tabulation:
trouble is that we've
nation
of economic
hypochondriacs."
aptly, "The
become
■
A
a
New
locomotives)
Balanced Fund
Monday, the Broad Street
Corporation, a Seligman af¬
A
out* a new bal¬
anced fund known as the White¬
hall Fund.
Fifty percent of the
Fundamental
portfolio is to consist of
Investors Inc.
A modern steam
brought
filiate,
An oil
three
NC
chemical and drug,
utilities and five consumer
It is interesting to
motors, steels or
goods stocks.
that,
note
other
Prospectus from your Investment Deoler or
no
industry issues
heavy
represented.
'=
!NCCR».O«Al|0
'
48 WALL
nothing particu¬
larly
new
in
the concept of
Whitehall Fund, at least its name,
'
STREET, NEW- YORK 5.-N-
fOVANOuis
are
.
While there is
HUGH W. LONG. & CO;
Y.\
which closely
:
classification
resemble the Navy's
of
submarines, is
different.
will
funds
their appearance
current vogue
ey stone
Custodian
that
rumored
is
It
balanced
vestment /
(More than 70%
in operation
over
a
in the investor's attitude
from ."appreciation type"
funds toward the relative safety
away
a
balanced
bonds
grade
common
portfolio
and
better
of high
quality
stocks. In effect, the
bal¬
defensive medium
in a period
market uncertainty such as the
anced fund is a
whose shares sell best
Eunas
of
present.
f
>•
Record
Prospectus
from
your
The
may
local investment dealer
or
Keystone Company
of Boston
SO
Congress Street, Boston 9,
Mu«.
Demand
for "The Doctor
Reviews Ilis
be obtained
The above titled
within limits.
Portfolio"
article written
described the
limits will be cannot be
Eccles
of the Federal Reserve
that Treasury bills
It is believed
might go to %% and
indicated yet, although
Board recently stated
certificates to 114%. • • •
will first unhook Treas¬
that the monetary powers
bills and experiment
level to settle at.
ury
Italy's application for
admission
the Na¬
advantages offered
chases of any
.
.
.
security.
;
...
:
to be quite evident that changes in
short-term rates which will result In a somewhat higher general
level of interest rates will at least take some buyers out of the
market, which probably means that a ceiling has been put on
membership was approved at
to
Therefore,
it
seems
meeting of;, the
in Washing¬
ton in October, 1946. Italy's quota
in
the
International Monetary
prices of intermediate- and long-term government bonds, for
Fund is $180,000,000, and its sub¬
some time to come.
•
r:
scription to the capital stock of
The psychological factor will be very important and will have
the International Bank for Recon¬
far-reaching effects on all those connected with the money markets.
struction
and
Development * is
A large number of buyers will no doubt be sidelined by! changes
1,800 shares of a par value of in short-term rates, with many of them likely to be out of the
$180,G00,000.
,
)
market for a considerable period of time. . . . The extent of th<j ad¬
The signing of the Articles of
justment in short-term rates will be very important in determining
Agreement by Italy brings the to¬ the amount of fluctuation that will take place in prices of the in¬
tal of countries having member¬
termediates and iong Treasury obligations.. ..
ship in the International Mone¬
Bank eligibles and restricted issues may eventually move in dif¬
tary Fund and the International ferent directions, but this is not likely to come until the market has
Bank for Reconstruction and De¬ had
an*f opportunity to evaluate the effects of higher short-term
velopment to 42.
rates.
; '
the
first
Board
annual
of Governors
...
.
.
.
.
.
.
whose ap¬
tional Securities & Research Cor¬ plication for membership was ap¬
poration appeared in the Jan. 4
proved at the - same time, have
issue
of ^"The
Journal
of the
until April 15, 1947, to sign the
American Medical Association." It
by Walter J. J. Smith of
.
.
...
What these
of all locomo¬
in 1946 were
old.)
.
they will not be entirely
Italy Joins Inf'I Fund
swing
of
25 years
While short-term rates will be al¬
without protection from
authorities, which means that fluctuations will be kept
create reserves.;
to
the monetary
with them for a while, until they find a
There will probably be some inter¬
ference by the Central Banks to influence the trend if it is believed
ihat it might be moving too far in either direction. . . . The reason
that Treasury bills, will most likely be experimented with first is
because they are a discount issue, without a set coupon rate, which
should make them easier to .handle and control. . . . Whether changes
WASHINGTON, March 27—The will be made in the certificate rate at the same time that the bill
Articles of Agreement of the In¬
rate is cut loose is purely conjecture although some informed money
ternational Monetary Fund and market followers do not believe this will be done simultaneously. . ..
the International Bank for Re¬
construction
and
Development COLLATERAL EFFECT?
What will be the effects on the intermediate- and long-term
were signed today by Signor Al¬
berto
Tarchiani, Ambassador of Treasury obligations, of a defrosting of short-term rates? ... , . The
Italy, on behalf of the Govern¬ immediate effect will be to create uncertainty in the market which
does not breed the confidence that is so necessary in making pur¬
ment of Italy.
making
from
turbine
Federal
lowed to fluctuate,
natural
before long. The
stems
357
320
268
much bank credit
ancj
113
tives
for this type of in¬
media
turbine locomotive-_
coal burning gas
additional
be
locomotive
trend of loans means that too
The inflationary
going into real estate and inventories. . . . This must be halted,
one way in which it can be done is by defrosting short-term rates. . . .
Varying short-term rates are likely to mean less selling of issues to
is
Chairman
stocks.
two
locomotive
locomotive
good to
Total load is 7%
with 5% going to dealers.
Only
16 common stocks are to be in¬
cluded in the original portfolio as
follows: Three oils, three building
stocks,
Diesel
A
high grade bonds and preferreds
and
50%
in
seasoned,
growth
common
loco.__$l,000
25-year-old steam
A
On
Sales
EXPERIMENT
Full-Speed New York to
Chicago Run (4000 h. p.
Cost of a
Syria and Lebanon,
Articles of
Agreement.
„
In
ments
.
1937, it was believed
would firm short-term
long-term rates,
that increases in reserve require- *
rates, with little or no effect on ;
the case.. . . The
about a temporary decline in
longs as well as the shorts. . ,
but this did not turn out to be
of reserves brought
prices of all Treasury issues, the
tightening
Volume 165
Number 4582
THE COMMERCIAL & FINANCIAL
CHRONICLE
(1799)
India Finance Qfficia! Opposes
Washington And You
Of
(Continued from page 5)
Federal export insurance
system.
Despite assurances by Bank Pres¬
circulating media in the
U. S. increased from $5 billion in
ident
1932
Martin
antee
is
that
such
no
needed,
guar¬
$30
billion
currently;
congressional
team will try to elbow to enact¬
checkbook money in the same pe¬
riod burgeoned from $22 billion to
ment
$80 billion.
a
bill creating an insurance
a
system similar to those of Canada
and
England.
Export
Bank would be told to administer
the law.
%
Praise
let
$
the
t'fi
Lord,
but
better
Washington know, too, if
want
Federal
written.
loan
That's
welter
testimony
He
gation
by
(1)
Commerce
uttered
Better
has
(2)
evidence
refused
a
The U.
nied
by
that
percentage of loan requests, (3)
argument by Treasury
Secre¬
a
have
Whereupon Chairman Capehart
plaintively: (1) is
RFC frightening small busi¬
the
not
(2) does small busi¬
need
from
loans?
RFC
He
de¬
list of loan
a
applications rejected since 1938,
appealed to small business for en¬
income
to
a
clubs
were
if
if.
obscure.
Heretofore
been
general
a
The
should
agency
standby
Such
be
shape
has
continued
after
June
in
30.
sentiment
Why?
is now fading,
to
the
question—
Unless convincing affi¬
davits
are
Is
yielding
small
that
enterprise actually needs
ministrations, the sprawl¬
RFC
ing
forthcoming
lending
bureau
be
may
scrapped.
*
*
^
the
*
A
broad
in
people
viduals
says
with
money
lower
comes
brackets.
insists indi¬
$40,000-and-up in¬
nuts,
comes
supply the venture money.
Argues Knutson
"People in
.
.
.
those low brackets cannot afford
to take a chance." Retorts
Sny¬
der
.
.
"They
.
taking
are
it
though."
*
if
The Treasury
this
deadlock
nearly
50%
if
of
proof
the
paid out by industry
that
dividends
go
to
per¬
incomes
receiving
sons
of
undertaken
Interstate
if
new
loans
peaks
continue
but
to
touch
absolved
are
by
the
OK
will
be
voted
shortly.
Jions within 90 da|s
*
The
if
if
„
*
*i
a
blame
by
for
Such loans
$11,077,000,000
The
potentials,
(2)
expand
with
the
four-cent
appraise
imports
may
suspension
of
Federal
total
experts
between
as
companies.
*
if
*
Washington expects
in
the
This
Reserve
decline
contin¬
of
jnember
bank
banks.
The Federal Reserve Board at¬
tributes this trend to
(1) in¬
creased expenses, (2) increased
income tax
charges, (3) d cline
in recoveries and profits
curities sold.
*
*
Here's something
in
connection
wil^
*
-o
7:"1
endorses
the
re¬
sure
accrued
are
the
His
re¬
are
TORONTO,
Frank
curities
Majesty's Government, which
in
due to be held in the
trial
taken
near
by
Shea
fu¬
is
CANADA-
engaging in
business, acting
Canadian
mining
as
and
Street, West.
-
h
jr
Office: 55 Wall Street, New York
independents
starved
by
fabricators.
the
of March 51, 1947
as
Including Domestic and Foreign Branches
(in
omitted)
dollars only—cents
ASSETS
Due
and
from
Banks
LIABILITIES
Deposits
and
$1,255,170,219
(Direct
Obligations
of
.
$4,544,599,922
.
Loan deposit
Fully Guaranteed)
or
.
(Includes United. States War
U. S. Government Obligations
.
2,127,347,620
Liability
Other Federal
ances
Agencies
28,904,830
$79,954,394)
\
•
Accept¬
on
Bills
and
$26,794,848
,7'
.
Less:Own Accept-
,
State
Municipal Securities
and
199,859,550
.
Other Securities
and
and
Customers' Liability
Securities
Reserves
3,137;04l
with
20,713,319:
6,081,529
Branches
3,303,569
.
for:
-
and
tV?:;
Other
^
-Unearned Income
17,538,998
,
International
Banking Corporation
:f
v '
.
Unearned Discount
for
Federal Reserve Bank
of
Transit
in
vr
1,093,559,848
JReajl Estate Loans
Ownership
Items
Portfolio
Bankers'
Acceptances
in
ances in
101,058,083
Loans, Discounts,
Expenses,
,
Dividend
.
7,000,000
Capital
29,094,212
.
Surplus
.
.
Other Assets
4,167,290
Total
Figures of Foreign Eranches
etc.,
.
7.:
;.
Total
.
.;y*.-<7v .yvr.frjtr
34,434,023
.
.
2,325,000
.
.
.
.
.
-
.
7.
$ 77,500,000
..
152,500,000
.
Undivided Profits
$4,873,737,691
the Dairen Eranch which
4,438,100
Interest, Taxes, Other Accrued
6,900,000
.
Bank Premises
phase
from
big
...
*
33,923,758
263,923,758
$4,8/3,737,691
.
included as of March 25, 1947, except those of
prior to the outbreak cf the War, but less reserves.
are
are
$300,512,637 of United States Government Obligations and $2,508,793 of. other assets are deposited
to secure $287,554,445 of Fublic and Trust
Deposits and for other purposes requited or permitted by law.
(member federal
deposit insurance
*
corporation)
being
producer-
Chc.itman
Vice-Chairman
oj the Board
Gordon S. Rentschler
'}•
of Condition
President
cf the Beard
W. Randolph Burgess
YVm. Gage
v
Brady, Jr.
The St. Lawrence
waterway has
been
given the deep freeze and
won't be thawed out until Federal
substantially
curtailed.
congressional
elements
presently striving to get
for the project will fail.
H*
on
se¬
CITY BANK FARMERS TRUST COMPANY
Certain
who
are
OK
an
Head
Office: 22 William Street, New York
^
to
Administration
Condensed Statement
fret
about the $1
billion of machine tools remain¬
ing in surplus.
The agency is
(in
of Condition
as
dollars only—cents
compounding
cf March 51, 1947
omitted)
a long-range plan
disposing of these machines
ASSETS
man¬
LIABILITIES
ufacturers, hopes to arrive at
a
Cash
detailed
conclusion
a
U. S. Government Obligations
month
less,
or
within
It's
and
(Direct
possible Congress
substitute for this executive
export restrictions on spe¬
cific items adjudged to be scarce.
if
•
if
Legislation extending the
on
Federal regula¬
moratorium
tion of the insurance
expected
to
be
adjournment.
law
the
Banks
from
Fully
of
.
.
.
Guaranteed).
and
Loans
and
in
V'>
.
$208,914,161
.
(Includes United States War
Loan Deposit
Municipal Securities
.
Advances
and
$11,251,378)
Federal Reserve Bank
.
Bank Premises
Other Assets
2,247,524
Reserves
4,391,832
740,054
Securities
1,730,602
113,870
........
.........
Capital'
$10,000,000
600,000
3,209,574
Other Real Estate
Total
Deposits
1,074,004
Real Estate Loans
Stock
183,495,914
Other Federal
Agencies
State
$ 45,868,509
Surplus
10,000,000
Undivided Profits
2,510,318
$241,590,369
Total
.
.
8,284,376
.7
28,284,376
$241,590,369
industry is
pressed
Under
before
existing
$14,442,492 of United States Government Obligations are deposited to secure the
United States War Loan Deposit and for other purposes required or
permitted by law.
(member federal
moratorium
expires i
Extension will!
be utged upon the grounds that«
many States have failed to
p*"*^;
next
or
Obligations
power
*
Due
deposit insurance
corporation)
January 1.
proper
laws
contemplated h*r
♦he original moratorium stat"'
\
Chairman
of the Board
Gordon S. Rentschler
a
se¬
dealer}
indus¬
securities, from offices at 32
Front
the fi¬
in Toronto
ONT.,
en¬
that in the negotiations with
Condensed Statement
inspire monopoly talk and
legislation fashioned to prevent
the
wl
LloyC
mm
Frank Shea
THE NATIONAL CITY BANK OF NEW YORK
fabricating
latter
may
a
{earnings as refected by a 5%
shrinkage in 1946 profits of Fed¬
eral
and
sufferings, sacrifices ture, the stand
may
scheduled.
t,
sult of great
integrated
non-integrated
now
.hand.
I
to the credit of India
tax,
(3)
analyze equity of supply distri¬
if
if
as showing
if.
business, industry and agri¬
Blanket export control author¬
culture are borrowing to
operate ity
for
the President
may
be
rather' than
spending cash on allowed to die June 30 as
uation
sterling balances
excise
that
:
"This Council is of the
opinion
that the
copper
interpret these figures
,
welcomes
General-in-Council that he do
Stock
■
investigators will
(1) look at foreign and domestic
brancl
N.
of
war;
should and
scaling down of India's marks of the finance member in
sterling balances."
his budget speech on the
subject
7 After
debate
the
Council
of of these balances and
accordingly
State passed the
following resolu¬ recommends to
the
Governor-
Acceptances
without injuring domestic
from
mounting inventories.
19.
re¬
an^recommenda-
ment
March
The
Committee will be directed to
port findings
for
reached
House
and
Treasury and Commerce Depart¬
experts
raw
Foreign
Com¬
Legislation di¬
recting the inquiry has been of¬
fered by Republican
Representa¬
tive Crawford of Michigan. House
continues
Commercial, industrial and agri¬
cultural
management
no
Bankers
of
Committee.
War Assets
if
that that there
be
Cash
supply and distribution is
be
less
than $5,000.
if
a
Street,
taxes and expenditures have been
blithely tinsels
with
can
tell
#
bution
from
will
investigation
and
Knutson
from
to
#
joint
risk
K
safe
a
?
Freeman, Jr. Mr. Freeman was
defense, as determined by the fi¬ and services on the
part of the formerly with Baker, Watts & Co'
nancial settlement, to the limit of Indian
masses who were commit¬
and Merrill Lynch,
Pierce, Fennel
her* financial capacity. It follows ted to
& Beane in Baltimore.
participate in the last
sub¬
viously big racketeering deals.
Treasury Secretary Snyder and
House Ways and Means Committee
Chairman
Knutsen
from
their
most
be
lawmakers
the
claims
the
1603
R.
,
lay off
prosecutions other than the ob¬
supply
stoutly
replied,
It's
shysters
the extent to which
Snyder
at
under
■
Head
will
If you've got some venture
cap¬
ital—or want some—better help
dilemma.
groups.
Berg & Co. have opened
consistently maintained that
—'
—r-—
*
if.
Congress.
OPA
merce
the
already paid for India's
J i
Russell, Berg Branch
just de¬
court
if
violators
by
wager
the
more
there
has
c
WASHINGTON, D. C.-Russell
lawyers with ambitions
ceiling
dued
to
feeling
India has
India
lacking.
was
copper
if
becomes
civic
or
paid
r
office
of
pretext
balances,
Cyril Jones, Principal Secretary of the Finance
Department of
Government of India, in the Council of
State on March 17
declared:
Government
an
dowf
defending this country
discountenanced."
is
the
to continue prosecution of price-
lightening data on loan needs—in
words, to put up or shut up.
future
amounts
expended for busi¬
reasons.
OPA
<other
RFC's
as
sterling
Sir
tions:
<?i",
Indian
on' the
scale
exemption to dues paid
corporation for its officers'
proof
wanted to know
away, or
■
proof of results
if
manded
that
against
balances
to
tax
ness
should be extended.
ness
*
S. Tax Court has
the dues
tary Snyder that life of the RFC
ness
boasts
counterclaims
is maintained
attempt
memberships" in the Kiwanis and
Rotary.
The corporation claimed
small
very
dues
as
of financially sound
business has been unable
obtain loans from RFC or
small
RFC
*■
gross
your
one-third
elsewhere,
CPA
weir as intent if you deduct from
Under¬
secretary Foster that one-half to
to
non-residential
on
'
.
alle¬
an
White
bowling
House is
British
member
any
return for
Alluding to what he called "the fulminations of the British
press"
concerning
"The
February it ordered 1,918
non-housing projects stopped-—
including a Long Island bowling
alley.
business
heard:
the
two
progressing despite tight Civil¬
ian Production Administration
conflicting
small
on
needs.
of
in
#
of
in
by Senate Banking Subcommit¬
Chairman Capehart after
a
alleys
construction.
tee
hearing
if.
Construction
restrictions
you
legislation
a prayer
if.
Import
-
that
the
Sterling Balances
cussions:
to
nance
Scaling Bown
President
Lindsay Bradford
,
THE
COMMERCIAL & FINANCIAL
Thursday, April 3, 1947
CHRONICLE
(1800)
20
Present Economic Problems and
apathy concerning the Canadian dollar free
.market in New York has produced its inevitable results. This outlook
hc3 teen based primarily on the fact that free market in relation to
the official market is not sufficiently important to be given special
consideration. The official attitude moreover stresses the point that
the unofficial market is essentially the concern of the non-residents
Who are given the facility to op-"
Confidence in' sterling was re¬
erate in this market. That the
stored
and
British
commerce
free market has any bearing on
ceased to be undermined by the
h.j
„
the
on
Canadian official
exchange market, or
Canadian economic stand¬
official
the
whole,, has always been
deprecated in official circles. To
some extent also there is a feeling
of, surprise
and bewilderment,
that in view of the Dominion's ac¬
knowledged superb management
of its internal affairs, the state of
the Canadian dollar unofficial ex¬
ternal market, should give rise to
any external doubt and uncer¬
ing as a
tainty.
belie
the wisdom of this attitude. It is
not an exaggeration to state that
ih the absence of this misleading
barometer of Canada's economic
Recent
state, the
Canadian
events
however
the
current pressure on
have
dollar would not
market.
vagaries of the free
comparison with the British
situation the Canadian economic
In
stronger.
restoration of
multilateral convertibility of the
leading currencies of the world,
the Canadian dollar alone with
the U. S. dollar will be the cur¬
immeasurably
is
state
of the
the event
In
less able to afford
highly unstable because three fac
tors introduce a large measure oi
uncertainty into the total eco¬
nomic situation.
They are: First
unsettled
problems
place.
Without
01/
c
h
an
per
withholding the coal supply has
aroused Congress and the people.
For all these reasons
time when the
at a
annum
sides
tion
50
with
both
Distorted Price
1
the
itself,
ized
In my
organ¬
April
but there
wholesale
WALL STREET
NEW
YORK 5,
anniversa
Starting
N. Y.
r
are
most
,
ernor
COMPANY
r
He served as si gov¬
of the Association of Stock
firm in 1919.
.
Exchange Firms for eight years. •
Street, New York 5
WHitehall 3-1874
.
The firm, one of the
oldest" com¬
mission houses in the country, was
Henry Clews,
Years in Wall
founded by the latq
of
author
Street."
CANADIAN
SECURITIES
Government '■
Municipal
Provincial
Corporate
five in
number, consist of Russell L.
Gil¬
railways, or else
for
relations
some
years.
The
peak period of mam-days of ^pror
auction
lost
through industrial
disputes lies behind us. The prin¬
cipal-reasons for this view are tnat
cost of living will stop rising and
may
fall
next year.
sure
for
unions,
moderately during the
This will reduce pres¬
wage
and
increases
Labor
their members,: are
bert, senior partner and member
of 'the New York Stock Exchange; less able to afford interruptions of
Charles J.Scheid; Augustin
A. income than, they were_in. 1945
Noonan
"Fifty
Present partners,
or
and Leta
Cromwell, special partner.
eral
partners,
.«
gen-(and 1946. because the 20% rise
Clews cost of living dtlring 1946 has
and Mr. Macllravy,
-»
tf, Mg:
.
{a
rose
annual
rapid
with
record
30%—the
increase
on
exception of the
the
50% rise in 1864 and the 40% rise
More significant than
the
prices is the dif¬
the rate of upward
over-all rise in
not expectations of
in
United States into the war in De¬
division
in
left
smaller margin of savings to fall
military forces
from the whole
withdraw
to
and economic aid
fibres in the face ef a compara¬
somewhat
but
of large
supply,
tively inelastic
smaller
derivative
of the in¬
closely related to
farming—food, textiles and hides
increases in the prices
dustries ;
.
most
arid leather—and of
comparativelythe balance
moderate increases, in
of
the
Obviously, the
economy.
restoration of balance in the price
Mediterranean area and structure requires a fall in the
compel her to contract her prices of farm and derivative
commitments in other parts of the products relative to the prices of
world. Already, the United States other commodities.
This adjust¬
eastern
will
has
begun to fill the vacuum so
in Greece and Turkey.
reated
events will cause this
country to occupy other positions
abandoned by Britain, even though
the wisdom of this policy has not
thoroughly considered.
been
ment
might be made by a fall
both
will
types of price adjustment
begin to occur within the next
year,
full
The
Budget
as
This raises
budget dur¬
outlays for foreign relief and re¬
habilitation will be larger and of
a
Will
tion.
duration than at first ap¬
probable; second, the
United States has become a
great
military power and is irrevocably
ommitted to the maintenance of
large
military establishment.
Consequently, our desires for sub¬
a
cuts
postwar
in Federal
spending, in taxation and in Fed¬
eral indebtedness are unlikely to
be
gratified in
expected.
have
*hat
$37.5
the
the measure we
It is improbable
expenditure of
Federal
billion called for in Presi¬
recommended budg¬
dent Truman's
et for the fiscal year
ending June
important, ques¬
an
fairly sharp fate of
decline (more than 10% per J an^
ing the next few fiscal years can¬
not now be foreseen, but two con¬
clusions are clear: First, American
stantial
European agriculture re¬
relief demands for
clothing taper
and
American food and
implications of these
facts for the Federal
onger
peared
in
prices, a rise in non-farm
prices, or by both kinds of price
movement.
It is probable that
farm
vives
The Federal
bargain¬
collective
G.
W.
Macllravy
bargains that push up costs ana
Hi eh
School
prices to a point where buyers
The
in Brooklyn, Mr. Macliravy worked hold back from the market.
in various departments and was year 1946 probably will mark the
admitted to partnership* in • the worst crisis in Aiherican industria
steel
gradua tion
from
Boys'
her
The logic of
Likely
ing that results in work stoppages
in
such key industries as coal,
in
after
1897
TAYLOR, DEALE
,
Statistics
Labor
their
opinion, a business reces'r
the next year is not
breakdown of collective
a
as
runner
NY-1-1 045
y.
During
index of
prices of the Bureau of
cember, ,1941, it is found that
the dis¬ prices of farm products at whole¬
astrous policy of Potsdam have sale have moved up 87%, prices of
delayed the economic recovery of foods rose 82%, of textiles 35%
In
all western Europe by two to four and of hides and leather 45%.
years and increased the relief it contrast, prices of fuels and light¬
must have ta survive.
War with ing rose 25%, metals and metal*
Russia is highly improbable dur¬ products rose 28%, building mate¬
ing the next few years, because rials 32%, chemicals 26% and
18%.
Against
the American people are reluctant hOusefurnishings
rise in prices Of farm
to fight another war and the Rus¬ an 87%
sian leaders know that years, are products, commodities, ether than
needed - to heal the gaping, eco¬ farm products advanced 33%.
nomic wounds their country bears
The wartime pattern of price
from the recent war.
Yet fear of change—which
has
continued
war
with
Russia will
persist. through the first quarter of 1947—
There
will
be recurrent crises is, therefore one of enormous rise
arising when the United States in farm prices, as a result of
and
Russia
make contact with greatly increased foreign end do¬
each other at the peripheries^ of mestic demands for foods
and
likely to be precipitated by bad
industrial relations.
By bad inj
dustrial relations I mean either a
1877, is observ¬
ing
its
70th
TWO
com¬
of government subsidies.
1946 the all-commodity
making for ference
peace.
The four-power
of defeated Germany and
sion during
1,
.
nearly all
demand,
great short-term economic insta- movement of different commodity
If we measure price in¬
bility is the unsettled state of in¬ groups.
ternational relations. > There is a creases up to the end of 1946,
the
active
entry of the
kind of peace in the world today, from
postwar replacement prosperity, it
must first cross the river Styx of
abor - management
difficulties,
Business Recession Not
Structure
modity prices have been moving
upward since the abandonment of
OPA controls and the tapering off
in 1916.
factor
a
The third important element of
.
.
m
„
strong
International Relations
second
but
year,
s"Ori-term instability in the pres¬
?n'; business boom is the distorted
impend
lng readjustment In the face of a
of a distortec
price structure.
period of industrial peace.
The
next
counteractive to
'
pect solutions to those problems
in 1947, but we may expect an in¬
Unsettled
the
a
recession that might develop from
other causes.
•,
of the
terim
in
recession
rather to be
,
^
firm. The firm
A. E. AMES & CO.
to 30%'in
of the international situation will
XTV. V v;i
oreign crisis and domestic price
readjustment. Let us try to eval¬
uate the probable bearing of these
actors upon business during the
year ahead.
j
on
,
be
unwise for Congress to make re¬
Co.
cele-
1
brated
64 Wall
there will be
strong disposition on
very
a
long-term interest rate on riskless
securities
is
about one-half as
years' associa¬
&
the United States by
position of
recent year save
depression or war. It ex¬
plains why they yield almost 4.7%
in deep
Ex
g e
April
would
domestic
share than in any
the New York
CANADIAN STOCKS
later—it
readjustments in a dis¬ tained the
preponderance of their probably be to reverse the recent
price structure
demands from management with¬ movement toward a deflationary
The presence of these large un¬
fiscal
policy.
Conse¬
out striking. The social irrespon¬ Federal
certainties
explains ' why
the
sibility of Mr. Lewis in threaten¬ quently, the state of international
equity securities of American in¬
relations is not likely to be the
ing to undermine the national
dustrial concerns are selling at a
prosperity and the international precipitating cause of a business
lower
multiple of earnings „ per
pending
torted
New York City, members of
Stock
I
reasons
personal income taxes retroactive
to Jan. 1, 1947.
The ret impact
mention
ductions of from 20%
respective1 .areas' of ^in¬
^merge for Americai|
mass-produced durable goods, for fluence—-in the Eastern Mediter¬
the equipment to make them and ranean, in the Balkans, in Ger¬
for the technical skills to manu¬ many, in China, and perhaps in
India. These crises will have un¬
facture them.
'
settling effects on our financial
Before the American economy
markets.
'The
precarious eco¬
reaches the Elysian fields of a
nomic position of Britain is forcing
partner
way,
other
early 1936 did not, in the main,
achieve their objectives, for the
reason that they could have ob¬
of industria
relations; second, recurring crises
in international affairs; third, im¬
George W. Macllravy,
in Henry Clews & Co., 9 Broad¬
CORPORATION
for
shall
markets will
With Henry Clews &
MUNICIPAL
RECTOR 2-7231
reason—and
back unused excess profits
tax credits.
Workers have seen
that the strikes of late 1945 and
carry
Macllravy Fifty Years
PROVINCIAL
Prospects
30, 1948, actually will be reduced
by a substantial amount. For this
collective bargaining
table to'reach agreements.
;.v:>
much.
It suggests that buoyant
Nevertheless,
ViiVlWO)
industrial
AliVlUOWA AUX
J. VAC*— 1
relamarkets for equity securities may
tions will continue through 1947 ,i
not be expected until these un¬
rency in the greatest demand. In
to be a factor of large uncertainty. 1
certainties are dispelled or greatly
a
world of scarcity of available
Congress will wrestle with two
reduced.
supplies of urgently needed food
great problems: How to make the
Underlying the more immediate collective bargaining process oper¬
and primary commodities Canada
is in a uniquely favorabl'e posi¬ forces of business instability are ate effectively; and how to insure
tion. It would appear therefore factors making for strong growth that collective bargains concerning
prosperity over the longer wages, hours, and working condi¬
that the Dominion not only has and
First, there are indeter¬ tions promote, and do not impede,
the means but also the most suc¬ term.
minate but unquestionably large
cessful of precedents, to take the
high production and employment
deferred domestic and foreign de¬
necessary action that would im¬
and stable prices.
We cannot ex¬
mands for durable goods of all
mediately dispel the current at¬
GOVERNMENT
INCORPORATED
work stoppages
they will not be able to
because
the free
kinds
by
consumers,
businesses
market,
rumors
of devaluation mosphere of doubt and uncer¬
and governments.
Secondly, the
and the bearish propaganda of tainty.
dollar amount of liquid assets held
During the week the market
interested parties would have dis¬
by American consumers and busi¬
sipated their strength against the was again influenced by currency
ness
enterprises in the form of
unyielding barrier of the strictly rumors and the weakness of the
cash, bank deposits, savings ac¬
Controlled official rate. In the rate for free funds. Dominion in¬
counts and government securities
existing circumstances the nar- j ternals declined but the volume
are about three and one-half times
was on a restricted scale. At the
rowness of the unofficial market
as large
as in 1939.
Third, as a
has aided and abetted bearish in¬ present levels it would appear
result of wage increases, heaving
that the devaluation rumors have
fluences.
progressive personal income taxa¬
I In the early stages of the war been fully discounted as the cur¬ tion and excess profits taxation
rent prices now closely approxi¬
|he free market for sterling in mate those prevailing before- the during the war years, the distribu¬
New York suffered from the same
tion of these liquid assets and ot
revaluation of the dollar last July.
disability. British prestige was
current income among consumers
Although the discussion of a pos¬
lowered and unhealthy rumor
is much better designed to support
thrived as a result of the inade¬ sible change in the official parity
arge markets than was the* case
intensifies with every fluctuation
quacy of the uncontrolled narrow
before the war.
Fourth, rapid ad¬
of the free rate there is still no
free market. As soon as the situa¬
vances were made during the war
tion became palpably embarrass¬ apparent reversal of the Canadian
in applied science and industrial
official attitude, which in effect
ing steps were immediately taken
takes
the
view
that there is technology in respect to military
to bring the free market in line
nothing in the present situation production. The utilization of this
$vith the strictly controlled offi¬
in
serving
civilian
which justifies a further adjust¬ technology
cial market. Fromi that moment
markets
will
create unusually
ment of the official parity. The
arge needs for new plant and
external section of the market
equipment and great imvestment
was quiet and inactive with Cana¬
Fifth, as world podian Nationals -in some demand at opportunities.
itical
and
economic conditions
slightly higher prices. Internal
stabilize, channels of
stocks were dull with the excep-i gradually
international trade and investment
CANADIAN BONDS
tion of the golds and papers which '1
will open up and large foreign
moved irregularly higher. ;y
taken
Business concerns are
back upon.
(Continued from page 2)
a
important
commodities! .as farm
products and the derivative jprod¬
ucts
of
the food,. textile..,and
leather
industries precipitate ja
general business recession?Such
a
result is conceivable.
Falling
num) in the prices of so
group
of
.
produce
diminish profit
expectations, lead to deferral or
cancellation of property expendi-»
tures and through this mechanism
can propagate a general decline in
production and employment in a
closely interrelated economy. Few
instances can be found in Amer¬
prices
on
inventory
ican
a*
wide
losses,
history of
tion in
front
sustained produc¬
association with a whole-
tit'
Volumo, 165 -Number 4582
sale price index
5%
per annum.
The
i
falling
more than
from
regime
$1.65 corn
and
niscent
of
the
of
$2.75
is
after
the
Armistice.
In
also
one
stand
months
War
II.
<
and
year
beyond the
end
Devotees
1947
ing,
of
will
the
issues
of
purpose
counteracting the
inherent instability of total
spend¬
ing in our free-market, private
enterprise economy.; This is not
the place for a full discussion of
probably
avoided
World
these
in
industries—and
this is vitally important—it is pos¬
sible to make some rough esti¬
"pattern"
First—In
view
of
forecasting point
to the
this
as
and
seek
them, not in terms of
ests, but in
Lucas, Cleveland Mgr.
nar¬
national welfare.
shall
we
the
surely
twin
If this is done,
economic
goals
of
§
OHIO — Union?
Corporation announced^
that William E. Lucas has been'
appointed Manager of its Cleve¬
Securities
our
free
society-rhigh and expanding
production and employment and
stable prices.
';
land
office
in
the
Union
Com¬
Building.
Prior to joining
Union Securities Corporation, Mr J
Lucas had been associated with!
merce
continued
a
«
CLEVELAND,
forward to
move
*
For Union Securities
broad framework of
a
!
«
to
and immediate personal inter¬
row
high level of Federal expenditure
and
Michigan Gas & Elec.
no substantial
budgetary sur¬
potential increase in plus on a cash
40%
basis, is it wise to
contraction
in
wholesale consumer
expenditures on non¬ reduce personal income
taxes by
prices and the 25% fall in rate of durable
goods in 1947 over 1946. 20 to
30%, retroactive to Jan. 1,
production that occurred within
// During 1946 about 2,750,000 cars
1947, while
methods of
such
answer
continue to
output more directly than fiscal policy and I
merely wish to
consumer demand.
Assuming that raise two specific questions re¬
important strikes and labor and garding impending Federal fiscal
material bottlenecks can be policy:
we
(isciy 21
•
durable
a
limit
seven
of
to
exemptions from time to time for
The productive ca¬
pacity of the durable goods indus¬
tries, including residential hous¬
price
signing of the
March of
smooth transition
a
non-durable
a
COMMERCIAL & FINANCIAL CHRONICLE
goods boom?
remi¬
agricultural
boom that followed
World War I,
a
boom that reached its
peak in
May of 1920, one year and seven
months
to make
omy
v,
present
wheat
THE
mates of: the
Common
Investors
Service
1931.
"l
Market
on
Moody's
since'
'
ri'M
^
one
year after
argue that
an
May of 1920.
equally
They
severe
and
post¬
civilian
war
business recession will
shortly
upon us.
Although there are
be
many
trucks
During
could
the
arbitrarily
by
tions, the analogy is not close for
several.reasons.
v,
sale
of
*
increased, number
value
gives
.
in
inadequate
vehicle,
expenditure
per
Electric Co.
about
142%, whereas, so far it has been
85% since 1939.
about
there
Second,
were
extended business in¬
ventory holdings predicated on
short-term bank loans built
up
during 1919 and early 1920, the
forced liquidation of which
accel¬
erated
the contraction in
prices
and production that
occurred later
in 1920 and
early in 1921. At the
present
time
aggregate
business
stock
was
of
more
tax
use
of the stimu¬
reduction
until
clearly needed?
non-farm
new
by 50% or to increase by $3.5 bil¬
lion,
A total increase of $9.6 bil¬
lion
in
spending
Second—Faced with
are more
most
widely
*
appre¬
hensive of imbalance in the
price
structure than it was in 1920 and
inventory commitments are being
more
carefully timed and watched.
A fotirth difference is
that the dis¬
tribution of income and of
liquid
assets among
is much
consumers
more
even and conducive to the
support of a continued high level
of consumer
in 1920.
spending than it was
larger fraction of con¬
A
sumers
have some savings than
dver before in history.
Closely re¬
lated to this is the existence oi
cushions to consumed expenditure,
ions to
prices, such
as
the
business.
*
that
ever,
icans
examine
are
business
and
much
larger
than it
and
notoriously
sensitive,
the
the
transition from
a
be
business
recession
is
within the limits
of
effort engaged nearly 50% of our
is
a
beginning
within
next year would not be
as
as
Fiscal
A
tax
TtrilX'1
:isj'
«;
was
T
■
Accrued Interest and Accounts
Receivable
/
sumer
hUrih£:
.
con¬
billion
of
the: "last
was
on
to
question is:
Will
in
increases
spendings on /durable '.goods
during the coming year be large
enough to enable the whole econ¬
fall
or
in
basis.
.
.
.
in
-
.
^
income
..
744,331,675.63
.
...
.
.
.
.
9,880,589.58
1,397,034.11
120,369,969.CO
4,892,989.78
.
.
116,233.25
.
#
I
.•
national
„
.
$
0-
.
■
•
Capital Funds
.
.
'.
.
.
.
56,982,565.66
,
.
,
.
<.
in
and
personal
income
,
'
$ ' 13,293,161.81
>
I
>
9,689,524.39
i 3,603,637,42
liability
as Endorser on Acceptances
Foreign Bills.
.?/
Dividend Payable April 1, 1947.
Items in Transit with
Foreign Branches
and
.
.
.
.
310,400.00
.
3,000,000.00
.
(and* Net Difference in Balances between Various Offices
Due to Different Statement Date of Foreign
Branches)
305,809.53
Accounts Payable, Reserve for
Expenses, Taxes, etc;
the
.;.
.
«
»
27,327,971.08
»
-
Total Liabilities
|
is very desirable and
it,
should be increased through con;
scious efforts by Congress to ad¬
rates,
356,882,565.63
2,450,270,491.32
..
^
....
r
- :
.
v
•
-
•
.
.
i
.
ibility of the present Federal tax I
expenditures,
'
from
'system
Federal
"
....
39,197,658.76
.,
.
$
-
rise
.....$
.
V /
r
r "
*
$2,411,072,832.56-
..
Outstanding
Deposits ;, > . ;y .:.
Investment
100,000,000.00
200,000,000.00
' *■'
in¬
hands to the Federal
Government. This "built-in" flex-
just
$2,841,800,875.01
.
...
.
..
diverted
J to
m
—v
—
■
.
.
556,267,827.44
1,415,822,179.31
3,603,637.42'
consumers'
!
60th
at
9,000,000.00
11,177,464.91
,
Acceptances
......'
Less: Own Acceptances Held for
These
sensitively with
income, so
accelerated
of
.
Total
any future rise in
national income will be associated
an
>
national
decline
spend.
amount
The
.
Treasurer's Checks
Conversely,
with
spent on
durables
well above prewar normal levels.
during
.
Total
Deposits
be met promptly by a
percentage decline in the
paid by some 35,000,000 in¬
dividuals and 300,000 corporations,
leaving more money in their hands
domestic
income
.
$
....
»85,311,243.58-
Mortgages
Undivided Profits.
will
come
and
able
.
and
collection
any
Large deferred demands for hous¬
ing; Automobiles, home furnishing
s
.
.
..
$
.
js .'">!>•}'
Capital
Surplus Fund
be¬
larger
1941.
Ave.
LIABILITIES
taxes
durable
appliances may be
expected ultimately to push the
proportion of consumers' dispos¬
.
and
corporate in¬
large part of which is on
current
lhat
The
dispos¬
year,
billion
individual
changes
well under that
prewar
$40
taxes rise
fericq being spent for services.
spent
'
Bank Premises .*
the
a
non-durable goods,
ari#£dl%, or $14.1 billion were
sfrent' on durable goods, the balconsumers'
.
Other Real Estate
a
comes, a
Of total
on
proportion of
able^ income
gcdds in 1946
'i
re¬
on
spe-Huiigs of $127
1846, 61%, or $77.2 billion,
spent
.
Real Estate Bonds and
said
system, fiscal policy has
of
...
..
.
,
current fiscal year consist of taxes
mainly in non-durable
notably food-.
be
fiscal
ceipts
recognition that the busi¬
boom that developed during
Officers
t
.
tax
Securities carried at $151,277,951. ll in the above Statement
are
>■
i
X".
'
~
Memler
Federal
Deposit Insurance
tax
/
resources
Corporation
-34,547,818.03
$2,841,8C0,875.01
pledged to qualify for fiduciary
as-required by law, and for other purposes. This Statement includes the
French, ppd'Belgian branches asof March 26. 1947.-'
V;,-." £
moneys
Wom¬
America
offices
at
are-U.
Malmberg, President, and
Ruth
B. f Evans,
Secretary.
Mr.
Malmberg has been proprietor / of
J. W. Malmberg & Co.
>
v i5
Policies
should
of total estimated Federal net
a
—
of
with
;
.
.
u
powerful tool for stabiliz¬
ing production and employment
at a high level.
Nearly $27 billion
^Another approach to the prob¬
forecasting business pros¬
pects during the coming year in¬
goods,
Monetary
word
.
<>.;
.
Stock ofithe ^Federal Reserve Bank
Other Securities and Obligations
Credits Granted on
Acceptances
■'
equaXpercentage
governmental
come
lem of
Broadway.
.
.
.
.
monetary policies. As a result of
wartime changes ia the Federal
Deferred Demands for Durables
ness
and
RESOURCES
Obligations
.
all-commodity index of
final
about
severe
625
Co.
formed
Hand, in Federal Reserve Bank, and Due from
Total Resources
that of 1920-21.
volves
an
"
Loans and Bills Purchased
Public Securities
u> *.
-'-lil-Jr-
food, apparel and leather goods.
the
been
Waldo
Banks and Bankers.'
wholesale prices with the con*
tractive price and production ef¬
fects concentrated in agriculture,
recession
CALIF.
Investment
has
BRUSSELS
•
...
on
.
25% of aggregate national
';,
MADISON AVE. OFFICE
•
U. S. Government
15%
a
1
Cash
in¬
not
fall in the
For all these reasons, it
safe prediction that a business
: SAN.. DIEGO,
en's
Plaza/.
PARIS
man-
Women's In v. Co. Formed
Madison
J
'v.
Index and to
nearer
Springfield, Mo. under the
Condensed Statement of
Condition, March 31,1947
non¬
durable goods booh
made without a dip, ir
United States fought a four-year
that at the peak of the war
income.
National
agement of C. B. Nelson.
Broadway
40 Rockefeller
a
war
War I for less than two years and
reached a maximum war effort at
Joplin
MAIN OFFICE
LONDON
decline in industrial production as
measured by the Federal Reserve
productive resources, whereas we
were active
participants in World
the
pect so favorable and well-timed
articulation of economic forces
fined
This time the
in
Building, Joplin, Mo. under {
an
2ral
now
stock,
stock offered to
;
140
f
the direction of V. C. Looper, and
in - the
Pine
Board
Building,
ROCKEFELLER CENTER OFFICE
evitable within the next year, but
the balance of probabilities is that
insistent
more
in 1920.
was
is
policy the public.
Fifth
\ recession
businesses
economic
FIFTH AVE. OFFICE
Avo. at 44th St.
expectation's
of iqqderata depth and
durationi, will begin: within this
tKj£ lareht demand'' fprr diitfdbie period, If it; pomes, X, should ex¬
goods,- including'housing, by both pect such, a recession to be con¬
consumers
Bank
Guaranty Trust Company of New York
The most defensible conclusion
that can be reached is that a gen-
for agricultural products.
preferred
common
recognize, how¬
^reduction and employment.
com¬
value
par
important that Amer¬ and the
American economy is highly un¬
stable and our history is punc¬
tuated with booms and depres¬
sions. One cannot reasonably ex¬
will
mitment of the Federal Govern¬
support "parity" prices
$100
price readjustment?
It is very
1
-
One is bound to
durable to
ment to
offices-
$16,509 a share, j Of the
of common stock, pro¬
sale' of 40,000
from ? the
of any
that
such ias GJ benefits and
unemploy¬
ment compensation, and of cush¬
offering
substan¬
a
of
(par
per share. The
awarded March 31 on a
'
likely contraction in
outlays on food and other non¬
durable goods by consumers, or in
expenditure by government or
In the
bid
ceeds
turaX
consumer
on
durable goods and housing during
1947 would certainly counteract
commun¬
is
Mr
,v
LOUIS, MO. — White
Company, members of the St. 1
Louis" and
Chicago Stock
Ex-!
changes,
have
opened
branch
residences.
are not excessive in
relation to sales volumes and
they
soundly financed.
it
■
Common stock
Branches
ST.
•
decline in the demand for
shares will accrue to the company.
agricultural products and in agri¬
Of the balance, 57,226 shares are
cultural
prices, should not the
Outlays on residential construc¬
Federal Government, Xn the inter¬ being marketed for the Middle
tion during 1947 could
readily ests of
domestic economic stabil¬ West Corp., and 22,774 shares for
reach $6 billion—an increase of
The
ity as well as in the broader inter¬ Halsey, Stuart & Co. Inc.
$2.7
billion.
Expenditures
on
est ; of
international
relations, company's capital set-up consists
other
consumer
durables
than
pursue a generous policy of loans of
$300,000 of 2% notes, $3,500,000
housing and automobiles amounted
and relief grants to
foreign coun¬ 1st
to about $7 billion in 1946.
It
mtge. bond series A 27/s%
tries, timed as far as possible "to
would.be possible for these to rise
series due 1976, 14,000 shares of
cushion
the impending
agriculon
inventories
third place, the business
ity is much more
Opens
$10)v at $17.75
,:
was
White & Company
on
consumer
value
lant
First, the rise in wholesale of $3.4 billion.
During 1946, ap¬
tial
prices during and
following World proximately $3.3 billion was spent
War I up to
May of 1920
banking syndicate headed by
& Co. and Ira Haupt & Co.
April 2 offered to the public
120,000 shares of Michigan Gas &
Otis
clear
no
stability to defer
units
in
of
there is
expenditure?
Would it not better
serve
the interests of economic
retail
$1,500
increase
an
of
average
an
progress and
evidence
5,000,000
vehicles
produced.
Multiplying
be
A
price inflation is still
for
.
States.
1947,
discomforting similarities
between the two economic situa¬
.
produced
were
in the United
use
powers, to secure
and liabilities of the
-
..
-
public
FnglisbK
-
-
St.
-
2
THE COMMERCIAL & FINANCIAL
(1802)'
Thursday, April 3, 1943!
CHRONICLE
Today we
last real estate boom.
Real Estate Market
©day's Shaky
there were some
three
million
families
in
the
United States who wanted to buy
houses last year and who were
willing to spend from $13 to $15
billion, but of this number onethird planned to spend less than
$4,000 for a home. On the average
the heads of these three million
(Continued from page 14)
at the peak of our curent
inflation.
Eighty-five per
nt
had
incomes of $4,000
or
ess, even
On
ess.
inquiries
believe it is
that the family
of
basis
the
hat I have made, I
ossible
to
say
study
Reserve
house.
To
this sensible
of thinking
way
my
attitude
on
public is
one
$3,000
a
standards.
guarantees on the GI loans.
But
let me say at once, private finance
real estate boom has its dark side.
resistance to high
-
_
nd
about 1%
a
interest
&nd principal and taxes.
If only
$20 a month is allowed for the
houses
of heating and repairs, we
a total of $1,200 a
year as
costs
ave
the
payment of
for
eeded
are
said
be
to
off
The
American citizen,
average
spending
of
incomes
-
than
rather
relatives
or
an
pay
exorbitant price for a badly built
According to this same Federal
n
The Public National Bank
.; A
.
<
A' //A/'''
\V;
r \
■
construction
of
high
costs
threatening
STATEMENT
State and
real
estate
Other Securities
.
.
.
.
...
of
istration
.
.
AA
.726,738.00
\
.
i:
.
-
262,779.36
;
$539,300,744.15
LIABILITIES
be counted
can
told that
am
on
to show
a
selves
bidding absurd pre¬
from
of lending
money at low rates on the basis
of
optimistic appraisals, at the
peak of what is surely one of the
great inflationary periods of his¬
miums for the privilege
tory.
Capital
$ 9,625,1
.
*
.
.
A
.
ATT-T
Dividend
Payable Apr. 1,1947
Unearned Discount
A
.
.
A.
.
.
A'
TA
615,660.17
4,529,680.35
A\
.
.A
*
:
.
to
appraisal of real estate so difficult
and so interesting.
It seems to
me that in this current state of af¬
appraisers of real es¬
a
great responsibility
and a great opportunity.
Your
judgment is often the deciding
fairs,
tate
you
have
226,408.04
a
503,931,630.61
TT
Reckless
for.
answer
U. S. Government
other
War Loan
pledged to
Deposits of $9,692,589.20 and
public and trust deposits, and for other
required
or
secure
purposes as
tion of the 30's.
estate
FEDERAL RESERVE SYSTEM-
.
-
GI
FEDERAL DEPOSIT INSURANCE CORPORATION
26 Offices Located
Throughout Greater New York
A
I feel that I
for this error
a very human error
share in common with
reproach
because it is
can
which you
you
supervisors.
That also has.
sin of bank supervision
bank
been the
—that
will
provides
loans
serious
a
But
bankers
and
banking institutions are not free
to conduct their business without
regard to the public welfare.
If
manufacturer of buttons or bot¬
a
tle
caps
conducts his business in
or speculative fashion,
unsound
he injures
But if a
he is
only himself.
banker makes unsound loans
whole
helping to undermine our
C
.
it
too
was
times and too
should
in good
easy
tough in hard times.
to invite you to>
like
with
me
that
resolve
we
will come again.
minute under¬
of your job.
I have no easy formulas to offer.
I only ask you as you do your
work to keep your standards high;
to maintain at all times the hon¬
esty, integrity and dignity of your
profession. In doing this you wiil
be serving best yourselves, your
I do not for one
estimate the difficulty
clients and the
public.
"Observations
•
V.
•
■
.;?• :■■■
.
only within
frozen
which many* cf
upon
sitting for
long years has at length
out.
should
of
not be
the
loans
sour
forgotten that
of
the
in the 1930's
1920's
i
•
'
.
(Continued from page 5)
decisions
realizing that wage
elements, without
and wages as equal
far more important. Increased wage grants are relatively
inflexible, as well as contagious throughout the economy on a nation¬
wide basis; while price adjustments, on the other hand, are both
raised and lowered quickly and individually. For example, contrary
to the trend of price boosts, Mr. Ford exceptionally reduced the price
on
his car; and on a single day a fortnight ago the International
Harvester Company reduced its prices at the very moment the Long
per se are
fare rise.
directly affect union
members exclusively and may themselves lead to price rises; while
price reductions react to the benefit of everyone, including the wageIsland Railroad Company was
It must also be
earner
filing an application for a
remembered that wage rises
himself.
The
Government's Responsibility
For Inflated Prices
consists in blaming
Actually, it is not industry
such responsibility.
Stability and reduction in the cost of living have very impor¬
tantly depended on the course of farm prices, whose level and direc¬
tion are determined bv government direction. At the end of January,
food prices began to rise further from the levels which were already
historically high. This increase was most pronounced in wheat and
corn, despite their bumper crops of last year.
The reason for this
Another fallacy,
shared by President Truman,
inflationary price rises en industry.
but Government itself that must accept
the
apparent paradox was
that enormous
government buying for export
vulnerable
last year created a price condition extremely
soeculative operations. In the important case of dairy
purposes
to
at
prices assuredly are too high, the
decided to postpone reduction
now
products,
Department of Agriculture
in the price of milk
until
least May first.
the
rise
Looking at the overall picture, we fir.cl that about 70% of
in the consumers' price index during the past year took place
of food.
in the category
Half of the last
year's increase in the
from rises in livestock
and dairy products.
amount, and this year
During
were
cost of living has resulted,
Total agricultural income
$14,700,000,000 in 1946, 25% above the 1919
is even surpassing 1946.
was
It
most
record inflationary
A:-A' udlih
August. 1989, farm prices, aided by
support, have risen 178% while industrial prices have
the interval since
made at two-thirds or less of ap¬
government
risen only 59%.
gage
loans are being made at 80%
This distortion in
and, in the case of GI loans, even
sions.
at 100% of appraisals.
we
could get into such diffi¬
with
loans
made
at
two-
how much
praisals are sound.
I realize, of course, that there
are
elements of strength in the
mortgage
which
For
were
lending
field
today
not present during the
high
the
widest economic repercus¬
this necessity of the consumer
food prices has the
price level of
diminishes his ability to buy durable goods,
demands .for additional wage in¬
which in turn stave off the necessary lower prices for those
hot only correspondingly
also brings
but
of
appraised value, think
difficulty we could get
into with 100% loans, unless ap¬
thirds
.
a
tendency around.
bankers had been
twelve
culties
MEMBER: N. Y. CLEARING HOUSE ASSOCIATION
is
optimistic
times and overly pessi¬
good
join
It is
the past few years that the
If
permitted by law.
That
to be overly
mistic in bad times.
I
praised values. Today many mort¬
Securities carried al $12,143,905.80 are
in
Pressures for Excessive Loans
flationary period, the 20's, brought
a ruthless reckoning in the defla¬
that went
$539,300,744.15
weakness.
obvious
not be made.
has
thawed
"
; A. .A A AT
Deposits
makes the
tendency. That is what
mortgage lending in the last in¬
our
812,038.30
1,737,999.37
j
tendency
whose
real
.§ $2,550,037.67
...
Less: Own in Portfolio
Other Liabilities
275,000.00
Contingencies
.
Reserved for Interest, Taxes,
Acceptances
$28,910,328.68
Financing
has made
mistakes in the past. It has
much
6,910,328.68
Estate
Real estate financing
many
22,000,000.00
Undivided Profits
Real
Bad
12,375,000.00
Surplus
or-bust, rags-to-riches, speculative
few of these
institutions cannot restrain them¬
.
and
me
in this difficult period.
sense
Yet I
964,837.17
.
\ \A:?v
.....
equal
2,227,175.32
•
Accrued Interest Receivable
or
tutions
660,000.00
.
.
;;
.
favorable
high prices."
Well, the public, including the
GI, is showing sense. I know that
most of our great financial insti¬
138,487,277.23
Stock of the Federal Reserve Bank
Other Assets
©state
1,749,657.78
.
Liability for Acceptances A;
Banking Houses
have
says
that there is "a
reluctance on the part
veterans to acquire real
other assets at prevailing
of many
8,130,431.62
looked back over the
estate appraising
mortgage lending, it seems to
that there has been one very
real
of
day and down the next.
Real
estate shares fully in this boom-
one
sharp decline in
In spite
extraordinarily
the
growing
Loans and Discounts
Customers'
price/3;
applications
for
veterans'
of this year were
down 25% from the'levels of la$t
summer and the Veterans Admin¬
y...
;
•
As I have
prospective purchaser
the market is strikingly
$103,814,003.01
.
of
loans in January
w
.<
record
system
the
282,277,844.66
Municipal Securities
loan.
has
been likened to a gambling casino
where the wheel of fortune is up
economic
American
appraisers
to resist boom
hysteria. This is the time for ap¬
praisers to proclaim that they
have a professional standing and
an integrity that does not permit
them to tailor the appraisal to the
characteristic of our economy. The
an
demagogues
are
the
RESOURCES
.
reproduction, current sup¬
ply and demand, current sales
prices.
Real
estate
cannot be
separated from the rest of our
economy.
It
is
indeed
highly
terms that are offered to veterans,
31*1947
This is the time for
to show the courage
costs of
the demand for GI loans.
.
current
temptation.
of
...
as
of
out
CONDITION
U. S. Government Securities
things
today in a quiet
will turn that
Let us be tough
I
know that today there are
driven above the reach of the
in flush times so that we can be
overwhelming- majority of our many pressures to stretch ap¬
easier when times get hard again,,
people, is creating a mounting de¬ praisals and to make excessive
The government guarantee for, make no mistake, hard times;
mand for an expansion of sub¬ loans.
illustrated by the
Cash and Due from Banks
such
consider
factor whether a loan will or
driven
March
are
enough to
price private in¬
dustry out of the market. Beyond
that, the fact that the price of pri¬
vately-financed housing is -being
to
flated
OF
great housing
a
afford to own.
appraisal of real estate
the
people, even at today's high level
of income and savings.
The extent to which current in¬
"
Main Office, 37 Broad Street
CONDENSED
of
In
values today, it is not
the
right as well as of the left. It will
do no good to denounce subsidized
housing if private industry cannot
produce adequate housing within
the means of the majority of our
of NEW YORK
' A',
V'-.
new
be
shortage the volume of residential
building construction has fallen
off sharply in this area with the
decline
in
privately - financed
housing especially severe. Current
There
AND TRUST COMPANY
-'
million
mort¬
loans in order to maintain a
2% dividend on savings bank de¬
censure
escape
sidized public housing.
that, tough as it is, they will go
on living doubled up v/ith friends
the
United
$5,000 or
in
units
has
face
the
In
showing his usual good sense, has
concluded that real estate prices
000 is necessary to assume costs and current costs of construction
of that magnitude, yet even today are too high. Thousands of poten¬
only 8% of the 46 million family tial home buyers have decided
States
a
would
units
even
what is today a relatively modest
ouse.
An income of at least $5,-
more.
dwelling
v,V -.v;
more.
in
living
of
cost
minimum
the President—that
started
this year have already been aban¬
doned.
The actual number, it
last year.
Prices of new houses now appears, will be at least oneare down from 15 to 20% from quarter to one-third less.
last year's highs and prices; of old
Residential Building Off
peak of the urgent demand
for homes now seems to have been
reached in the second quarter of
The
mortgage. •>.. That
month or $80 is
$8,000
an
eans
Demand Passed
of Housing
Peak
for
competition
excessive
gage
numbers of GI loans go bad
the Bureau af Labor Statistics and
just see how that works
ut. Let's assume a $10,0000 house
s sold on the basis of $2,000 cash
Let's
thrifty citi¬
this nation to enter into
of
zens
injures
he
thus
and
economy
everyone.
/
It is no favor to the
if large posits ins.tead of 1Me%* It is nor
leav¬ favor to a GI to lend him more
ing the government holding the than he can afford to borrow m
order that he may pay more than
bag.
it is worth for a house he can't
Factors in Appraisals
not
will
Yet, of course, the halt in the
This increased
FHA
We have government
and
insurance
FHA
have
income
cannot
prices has resulted in a sharp drop
rdinarily afford a house costing
family units expected to pay not in new home construction. As was
ore than $6,500. The family with
more than $5,000 for a house.
Is the case after World War I, con¬
$4,000 income cannot ordinarily
it" any f wonder that a chill has struction costs today are continu¬
ford to go above $8,500 and it
come over the market for homes
ing to rise even after construction
akes a $5,000 income to swing
in the past few months, even iri activity has started to fall off. The
$10,000 house.
the face of the greatest housing government forecasts — joined in
by the Department of Commerce,
crisis in our history?
Costs Too High
ith
amortized
larly
the part
of the most
encouraging developments in re¬
cent months. A
A .dA
-A A
of the
of the regu¬
mortgage.
We
have widespread use
creases,
.
about successful
durable goods.
Instead of
ment
well
the
should
as
inflating the price level, govern¬
baiting industry for
get
a
about its own responsibility, as
propensity to lend its prestige to
bit introspective
concerning its continuing
popularization of the other fictions
about the wage-price situation.
165
Number 4582
THE COMMERCIAL & FINANCIAL
CHRONICLE
stabilization provisions should ex¬
pressly state that they are not in¬
tended to prohibit "transactions
Recommends Revision of Securities Act
(Continued from page 6)
whom a prospectus
may be ob¬
tained and by whom
orders will
foe executed) should be
broadened
Exchange Act and which has filed
brief
a
description
of the securities offered.
(b) A short form of prospectus,
,
similar in
its scope w
newspaper
me
prospectus, should be
authorized for circulation' at
any
a registration statement
time after
is filed.
After the waiting period
has expired, it should be
permis¬
sible to make sales on the he«?is
*
of
this
short
; However,
should
form
tuil
tne
be
prospectus,
available
piuapect-,to any po¬
tential investor who desires it and
should be sent to all investors to
whom
i
sale is made with
a
Such
short
a
should
prospectus
limited to a
brief statement of the
general na¬
of the issuer's business and
ture
assets and of its funded debt and
.
capitalization; a brief summary of
its earnings
during the three pre-
4
ceding fiscal years; and a brief
statement of the amount and
pro¬
posed
the
proceeds of
issue, the offering price and
name of the
principal under¬
the
writer.
foe
of the net
use
The
given
Commission
should
to require addi¬
tional information by regulation if
power
necessary in the public interest
for the protection of investors.
(c)
Condensation of the
or
*
infor¬
mation
required in the regular
prospectus should be authorized.
(d) The regular prospectus re¬
a company which has
previously registered under the
quired for
Securities
curities
has
Act
under
or
the
Se¬
Exchange Act and which
regularly filed
annual
and
the
interim
required
with
reports
the Commission should be
short
a
document setting forth simply the
general nature of its business and
*
*
assets, pertinent facts concerning
its capitalization and the securities
-
being
offered,
financial v state¬
ments, the purpose of the issue;
net
proceeds, the offering
price, underwriting discounts and
*
the
Similarly,
the
of
names
a
required
under
these
secur¬
ities simply by
of prospectus
filing
short form
containing the in¬
company should be permitted to
file the statement officially and
such
filing should be followed by
brief, fixed waiting period on
the expiration of which the state¬
a
ment would become effective.
This
procedure
quired
for
be
all
that
companies
re¬
which
are
; State
1-
commissions.
The prospectus required for of¬
fering by such companies
conceivably be the same
might
as
the
short form of prospectus
suggest; <ed under paragraph (b) above.
offer
It
teen months old when
It
is suggested,
therefore, that of stabilizing the market in con¬
exemption be increased to nection with or to facilitate a
$500,000 and that a reasonable primary or secondary distribution
waiting period be required after of securities provided that such
filing of the offering circulars and transactions are (1) reasonably
nipulation
provisions of the
Securities Exchange Act.
Orderly securties markets are
clearly in the public interest and
at times the market for
any partic¬
ular security may
require the
tive intervention of
*
3.
under
tration statement.
an
both
r
is
closely related
task
of
sale
.
under
filed
registration'
a
the
sale under the 1933 Act. Consider¬
able
in
has
progress
the
Commission
rpermitting
under the
7
been
made
the
material
President
1933.
,
Awkward
forms
.
of
and
expensive
registration
statements
have been abolished
.
ones
.
of
adopted.
and
There
simpler
has
been
a
noticeable increase in the cooper-
.
ativeness
of
the
staff
and
in
'understanding of the problems
its
and
difficulties of
the company
seekT
ing to register its securities. However,
it is still expensive and
-
-
sometimes difficult to compile and
set forth all of the detailed infor¬
mation still
lays inherent in the
-
result
*
::
;
.
in
process
often
the
company "missing
the market" and being unable to
sell its securities.
■:
.
required, and the de-
(a) One step along the lines of
simplification would be to authorize, in the case of a company
which
under
has
the
previously
Securities
registered
Act
or
the
or
rescis¬
misstatement
of, j
state, a material I
fact, proof that the person bring-1
ing the action relied upon the mis¬
to
statement
or omission, (3) permit
delisting a stock by vote of a
majority of the holders of the|
stock, and (4) exempt employees*
pension plans from the registra¬
tion requirements of the Secur¬
or
Kent, John Lowry,» Jeremiah
fj
Maguire, ' Frank
Wilbur
Ma~
and
specific
integration
of
Cash
in
Vice-President
PAUL C. CABOT
to
Stock
President State Street
Investment Corporation
BERNARD
S.
CARTER
President Morgan & Cie.
achieving
CHARLES S. CUES TON
size
istration,
but
supervisory
with
powers
COLLYER
These costs
sue
than
are
so
RALPH
W.
are
a
borne
by
Railroad
the
other
Vice-President
connection with the sale of the
securities of small, little-known
companies. Hence, if the amount
the
exemption
is
Grenfell
increased, it
4*
Cie. Incorporated)
Accrued Interest, Accounts
-/i/i
jpjo/
13,500,363.oo
119,431,156.56
Receivable, etc.,
Banking House
• • • •
2J)4l2308.79l
3,000,000.00
$
9,262,016.59
509,308,80
Prepayments
>'■■■
'
8,752,707.79
$670,040,278.3f
Accounts
•
^
.
,
$572,684,679.17
Deposits.
25,614,711.40
Payable, Reserve for Taxes, etc,.,
Acceptances Outstanding and Letters
Credit Issued.
of
-
; '
j
9,262,016.591
V...'.
Surplus
Undivided Profits
.
$5982299,390.5/}
4,4o4,451.9&
...»
20,000,000.00:
20,000,000.00
18,024,419.20
$670.040,278.32
JR.
Chairman General Motors
Corporation
United States Government securities carried at $28,234,250.87 in the above
Statement arc pledged to qualify for fiduciary powers, to secure
President Krnnecott
Copper Corporation
JAMES L. .THOMSON
public monies
as
required by law, and for other purposes.
Chairman Finance
hand, the likeli¬
in
of
of Morgan
Morgan
£. TAP PAN STANNA RD
to
hood of fraud and of unwarranted
-
1,200,000.00
(includirig Shares
Co. Limited and
Capital....
ALFRED P. SLOAN,
an
misstatements is probably greater
.
JUNIUS S. MORGAN
increase in the size of small issues
On
Company
Vice-President
development and financing
of small enterprises
and, there¬
fore, in the minimizing of th£
up
'
14,842,314.00
of the Federal Reserve Bank
IF. A. MITCHELL
investors.
exempted from registration
$500,000 appears desirable.
,
365,027,608.39
Official Checks Outstanding
G US TA V M ETZMAN
distinct public interest
financing. Hence,
*
.
LIABILITIES
President New York Central
in the
costs of such
\
$141,744,/ 98.93
GALLAGHER
Vice-President
large one.
high that an is¬
a
ly uneconomical.
It
should
be
borne in mind that these costs in¬
directly
\
Municipal Bonds and Notes......
N. D. JAY
small issue of
of less than $500,000 is usual¬
There is
%
Vice-President
the
THOMAS S. LAMONT
issue
V■?*
CHARLES I). DICKEY
expensive in proportion to the size
the
:' 7-
from Banks
of Credit and Acceptances
Vice-Chairman Morgan & Cie.
Incorporated
of
Hand and Due
Other Bonds and Securities
Less
Vice-President
of
securities is generally much more
a
.•
Liability of Customers on Letters
Company
part of the SEC.
Registration of
•
;;.
President The B. P. Goodrich
broader
on
'
Loans and Bills Purchased
informa¬
JOHN L.
on
State and
Incorporated
the
Young,
EdwardJ.B..
(Counsel for Commit¬
^
vHv'
United States Government Securities
I. C. R. AT KIN
filed
study.
increase
I.
Twombly
tee).
ASSETS
Vice-President
Acts require considerable thought
An
x
-.
Vice-President
requirements under the .two
4.
Howard
ARTHUR M. ANDERSON
desirable.
the
G. Smith, Laurence Ar¬
Tanzer, Joseph MJ. Wells,
nold
Condensed Statement of Condition March 31,1947
r
Congressional
would be
Russell
INCORPORATED^
IIENRY C. ALEXANDER
by
be used
The ways and means of
for
Act
on
NEW YORK
GEORGE WHITNEY
small issues exempt from reg¬
Securities
a
based
,omission
Chairman Executive Committee
administratively
1933 Act to
authorization
accom¬
securities
damages
sion
or
J. P. MORGAN & CO.
under
Act, it should be required
only to file a simple prospectus to
register additional securities for
1
registering
these Acts for
R. C. LEFFING WELL
the
either
plished by the Commission along
the lines of simplification of the
,
prospectus
would
require¬
Commission's proxy
the
management's proxy state¬
ment, (2) require, in any actioix
brought under the provisions ofj
disclosed
are
THOMAS W. LAMONT
the two Acts.
subject
to
once
and
Much has recently been
a
which
present
in the
otherwise to purchasers of the se¬
curities being distributed."
Such changes would do away
•
simplification of the
registration process and the sug¬
gestion that after a company has
Simplification of the registration process.
<
of
of
the
regulations that any proposal ofi
any stockholder must be included
interested
II. P. DAVISON
2.
transactions
b.y / means
Chairman
This
tion
reg.s-
ac¬
of such
matters^which
amendments
outlaw
ment
distribution of securities, the gen¬
eral character, extent and effect
DIRECTORS
Integration of the information
and registration requirements
is used more than twelve months
a
(1)
clearly authorized not to re-t dicate that
To avoid any repetition of these
they are aimed at
quire all of the information spe¬ transactions intended
to create a abuses, the power of the Commis¬
cified in Schedule A of the
Secur-j false and misleading appearance sion to give publicity to unproven
ities
Act.
In other words,
the With respect to the market for the allegations of wrongdoing should
Commission should be given dis-^
be
security dealt in; and
carefully
restricted
and
it
cretion to require in any registra¬
(c) the anti-manipulation and should be required to hold private
tion statement only such of the
items called for by Schedule d A
as may be appropriate and neces*
sary in the public interest and for
the protection of investors.
true
after the effective date of
elude
the
5. Clarification of the anti-ma¬
3
,
other
should be covered by any program
to amend the securities laws
in-f
more
prospectus
a
issues.
Some
lishing or maintaining a fair and
orderly market or for the purpose
.
ment
revised prospectus.
a
provide that the informa; lion should not be more than fif¬
supervisory
,
ments
.
power over such
qualify for listing under the 1934
Act, but there is room for improve¬
in
some
public hearing.
effected for the purpose of estab¬
.
(e) Section 10(b) of the Secur¬
ities Act requires a change to per¬
mit the use of a year-end stateshould
fitting that the Com¬
with the ambiguity, indefiniteness
ities Act.
buyer or seller if it is to be kept and uncertainty of the present
Any law enacted to amend thesqr
orderly. Under the present anti- provisions which have tended to
in preliminary form
during the manipulation provisions of the Ex¬ weaken and hamper the function¬ Acts should specifically providethat it should not be construed
waiting period after the formal change Act it is doubtful, at least, ing of our security markets.
as validating,
ratifying or approv¬
filing with the knowledge that no that anyone may thus intervene
further changes would be requir¬ without
6. Restriction of publicity on ing any rule, regulation, form or
violating those provisions.
order theretofore prescribed or is¬
ed. Secondly, the issue would not
unproven charges.
On the other hand, fraudulent
sued by the Commission unless be¬
be prejudiced, as issues sometimes
manipulation, that is, manipulation
Jn its earlier days the Commis¬
fore its enactment a thorough re¬
are
now, by public knowledge of which misleads and deceives in¬ sion in a number of instances is¬
view and study is made by Con¬
the delays, which are often un-i
sued orders charging individuals
vestors, should be outlawed.
gress of the existing rules, regula¬
avoidable, in getting the registra¬
Accordingly,
it
is
suggested and companies with the grossest
tion statement into a form satis¬ that:
j
sort of wrongdoing before any of tions, forms and orders.
factory to the SEC. Finally, the
(a) the preambles to the Ex¬ the charges were proven. In some
issuer and the underwriters and
Committee Members
v
change Act should be amended to cases the charges actually proved
dealers handling the
issue, know4 indicate that one of the purposes to be unwarranted or greatly ex¬
Members of the Special Com¬
ing definitely when the registra¬ of the Act
is "to encourage and aggerated and in one notorious mittee on Security Regulation are¬
tion is to become effective," would
foster orderly; active; stable and case, which is still undecided, the as follows: Louis K.
Comstock,
be able to make their plans ac-i
liquid markets for securities upon mere publication of the Commis¬ Chairman; James M. Barker, Wil¬
cordingly and would not be sub¬ securities
exchanges and in * the sion's charges resulted in an over¬ liamBreed, W; Gibsoh Carey,
ject to the risks and uncertainties over-the-counter
night loss of millions and millions Jr., Herbert L.
markets";
Carpenter, Lionel
of the present procedure.
of dollars to the stockholders of
(b) the anti-manipulation pro¬
D. Edie, Charles R. Hook,
Fre<y ~
(c) The Commission should be visions should be amended to in¬ the company.
pros-
is
subject to regulation by, and file,
as matters of public
record, detailed reports with, either Federal or
*
would
advantages.
In the first
place, short form and complete
prospectuses could be circulated
underwriters.
relatively short
should
seem
23f
hearings on charges of wrong-do-v
ing unless the accused requests a
(b) Another amendment which other data and that the Com- necessary for such
purpose,
(2)
would be most helpful, would be mision be
given stop order powers not excessive in volume, (3) ef¬
one requiring the Commission to exercisable
both before and after fected within a reasonable price
review
a
registration statement the expiration of the
waiting pe¬ range, and (4) reported daily to
before it is formally filed. When riod in case of
any material mis¬ the Commission; and that, when
all deficiencies developed in such
effected in connection with or to
representation.
revie w have been corrected, the
facilitate a primary or secondary
*
pectus
a
formation indicated in section 1(d)
above.
the
-
SEC
several
lorm
generally be
interim reports to
and
Acts, the registration of its
prior
or
to the confirmation of sale.
,
mission be given
annual
the
to permit an indication of
the na¬
ture of the business and assets of
the issuer and
would
all
(1803)
■
.Volume
V
.
Committee Hartford Fire
Insurance
Company
Member Federal Reserve
JOHN S. ZINSSER
President Sharp & Dohme
Inc.
Member Federal
System
Deposit Insurance Corporation
_
m
THE
(1804)
Thursday, April 3, 1947.
COMMERCIAL & FINANCIAL CHRONICLE
Britain's Economic DilemmaSecurities Salesman's Corner
By JOHN DUTTON
released March 19, 1947,
that the more successful salesman of today sells industry not common
stocks.
By so doing the thought is directed to the prospect's mind
that the salesman is interested in rendering an investment service
rafner than selling a particular stock. At any rate the idea is work¬
able and it is a subject that has appeal at this time. It doesn't take
an investment
expert to see that the securities of some industries
are much more inviting mediums for investment than others.
The most effective sales presentations always come to the point,
They don't ramble all over the lot. So if .you wish to sell the idea
to your customers that certain* industries are more promising invest¬
ment medium than others, do it in the fewest words possible.
One approach to an understanding of this complicated subject is
to ask ourselve-. what makes certain industries attractive in the light
of todav's economic conditions. The answer lies in recognizing the
CAUSES FOR SHRINKING PROFITS and finding industries that
eliminate such handicaps to a larger extent than others.
;
Here are the two profit killers in American industry today;
high labor cbst and the strikes and troubles that make up our un¬
settled labo? situation; and uncontrollablecosts; of raw materials.1
There are some industries that by their very nature USE a
smaller amount of manpower than other lines of endeavor. These
ate the service industries such as insurance, personal loan companies,
the oil industry, utilities—particularly natural gas and hydro electric
power companies—soft drink manufacturers, chemical companies and
concerns engaged in the, operation of coin vending services.
If you
will look at the record, labor disturbances have been conspiciously
Hare's Ltd. has
suggested in
a
memo
,
.
absent in these industries.
Its Origin
==EE=^=E===
1 jj
-
■
(Continued from first page)
lieve
out imposing tne necessity
of certain reservations.
it is
Commonwealth
as
usually called.
That Britain is no
be
embrace
.
more
now more
sure
■? There are other reasons why industries
are attractive or un¬
attractive but it is best to make a simple presentation of the high¬
l,y
lights and let it stop there. Any salesman who talks like a college
'professor in economics may impress a few people but he will bore
more of them than he will sell.
For instance there are new product
hithei to
for
ist
pyr¬
longer to hold the gorgeous East
in lee and that, beyond this, her
Colonies and Dominions will soon
sleep therein, will be the
politicians.
compete with her for international
trade, ends a highly remunerative
It
in
direction,
being
aware
namely that of the coal industry,
nationalization has few opponents.
without
that
one
difference,
a
was
the fault of Individualism as
such and believes,
indeed, that the
Britain of two wars has been
impoverishment, although that Is
not perceived by the majority ol
her people.
The loss of overseas
investments, the recession of Lon¬
upon
don
international financial
an
as
unfavorable
center, the new and
has to be admitted that
against 308 tons for 1937.
But it
the former
recorded
regime in the coal mining indus¬
that
try had brought about an impasse.
at the election that
Individuals to Save the
Government-
f;
The
The issue' by the British Gov¬
ernment of the recent "Economic
Survey," constitutes a drastic ad-?
mission of much that it had
significance of the changa
little
so
to
buy.
But the man
limited means who is able
ing
of
notes feels himself
a position of no small
Additionally, the govern¬
many
elevated to
ment, until the last few months,
fostered
the
pre¬
It should be
appreciated that much within the
"Survey," excepting statistics, is
based upon memoranda pre¬
pared for the > former Coalition
redeeming feature.
idea
of
relative
has, for example,
to the latter
55
LIBERTY
for
Co., Inc.
STREET, NEW YORK 5, N. Y.
period. But, actually,
these figures are of little guidance
without a comparison of respec¬
tive
qualities:
and
is not forthcoming.
authorities
persist
indices
to
cost
living
of
show
Over-the-Counter Quotation Services
the British
rise
the
1939
ceptive result
<■
Chicago
BUREAU, Inc.
a
is
San Francisco
it has been at so
pains to discredit.
But the
then the
by
in
vided
Superimposed
upon
the
of
the
nation
is
now
the
unless he is pro¬
incentive and unless,
with
rates have increased con¬
siderably and—rit may be noted—
with no corresponding rise in out¬
the
the economic position
middle class who
normal'y provide much of the
creative energy for industry
as
well as for the
professions has
put.
of
more
presses
upper
capitalist
Moreover, the
to
enterprise in
State encroach¬
ments and for the State to claim
order
slowly
''
class is not willing
launch out into new
to
assist
as being its own
fruitful work. Therefore, the pros-
such enterprise
heavily, and the more
i-.r
But
the
steadily worsened.
whole;
rising pyramid^of- nationalization.
It
people were told
once
the
coun¬
Age of Plenty would be¬
motives
men's
that
conduct
and
best advantage.
Satanic Suspicions
Undoubtedly,
Conservative
ment
to
duce
more
were
National,
a
Liberal Govern¬
or a
the people to pro¬
work longer, it
urge
and
whole-hearted .re¬
would
get
sponse
from capitalistsj and frorn
the
a
and
upper
unionists
were
of
;
trade
be foreseen, but
cannot
to come only from
previously named, the
response
the classes
these
disinclined to undertake
are
the
effort in
special
But the
that
is
situation
present
renascence
considerable.
be
would
classes
national
of
extent
trusted
different
and
Promises
made
Government
own
middle.
lower
attitude
The
classes.
absence of
direction^
Socialist
by the
outcome of its-
as an
extremity are regarded as
in the classical category
the devil was sick the
coming
when
that
devil
a
saint
wou
d be, but when
gentleman was out of danger
devil a saint was he. The Socialist
that
Government,
will
then,
have
to
rely mainly on trade unionists to
answer their call for higher pro¬
and the financiers?
Readjustment But No Immediate
Emergence
The
conclusion
of
the
whole
that there is at present
matter is
leading out of the
which Brit¬
herself.
The immediate
way <ppen
ain finds
individual is not going
also, he is assured of a right re¬
ward for his labors. It is true that
few selected items and
traveling, which has
•
fact
gin.
But it has been officially
discovered, in less than two years,
no
to produce more,
This wholly de¬
secured
the
economic dilemma in
psychological and economic fabric
1913
.43 Front Street; New York 4, N. Y, V
•
Government
Production and Incentive
:
Nationalization Trend
Established
hitherto
which
much
than doubled.
-
disavowed
has, in fact, without
leaving out the rest—including the
cost of
•
The Socialist
rulers.
only
is
in
duction.
Even supposing—and it
by Whitehall with a coolness Very
near to the impudent.
The indi¬ is a large supposition—that trade
are
willing
to
work
vidual is being told that the fate unionsts
of the nation depends entirely up¬ harder and for more hours, can
the effect be decisive without the
on him working harder and not
cooperation of the brain-workers
upon the alleged wisdom of his
wage
taking of
For 34 Years
.
defeat in the eco¬
nomic realm has been
this guidance
Even now the
in publishing
that
since
about one-third.
NATIONAL QUOTATION
or
success
making due
published figures of pre-war and acknowledgment and while still
post-war consumption of food in enshrouded in dogmas, fallen back
Britain, with litt.e disadvantage upon those tenets of individualism
It
abundance.
lies
above
are governed not by the theoreti¬
viously denied or ignored. There
is no longer any make-believe that cal, but by the realities with which
Britain's economic position is en¬ they meet in everyday life and
which they have to turn to the
viable, or even that it has any
trade—to
of
directions
has
&
mere
try
was
committed, through
a
parliamentary majority, to the ac¬
tive pursuit of the Socialist ideal,
other—are happenings
stature.
Herrick, Waddell
the
.
of truly
request
or
direct
industry but oniy to "influ¬
ence."
This might be a distinction
said
be
The most conservatively minded wearing of kid gloves in order to
privilege and pride of
find themselves in agreement with distract attention from a red tie.
place. The transition is one cast¬
the London "Times" when it de¬ But it probably is the position, as
ing a shadow on British mentality,
as
Mr.
clares that "low wages, short time, far
Atlee, Sir Stafford
although few would defend the
Cripps and. Mr. Ernest Bevin are
practice of Imperialism.
But the unemployment, social isolation,
concerned, that they would be
mind of the Briton has changed and, in the past, the contrasting
wealth of coal owners, have left happy in'proceeding along radical
in other/ ways "during the past
their legacy." Nationalization may lines which stop
well short of
thirty years. He is still at heart an
not prove
the . solution of coal "Socialism in our time." Even so,,
indiviaualist, chary of planning
business men see no reason why
and organization from above, but mining difficulties, as witness that
he feels that between
1918 and in 1946, with nationalization un¬ they should facilitate the expedi¬
encies of those who now wish te
1939 Individualism made a poor derway, the output of deep-mined
show. He is unconvinced that this coal per man was 259 tons as capitalize their own failures.
to carry out some black market
or similar deal involving the pass¬
on
careful in
that it does not wish to control
period of
and
*Prospectus
it
of what is happening.
The government is very
.
*Oberman & Co.—Common
as
and fil3
its latest pronouncements to insist
That government's
name no Government.
demanding point of view is, therefore, at this
industies such as air-conditioning. Such opportunities for profitable compensating replacements which,, late day endorsed in principle, so
investment can be clearly indicated by making reference to the large however, have not been made.; justifying Mr. Churchill's plea for
market which exists in the industrial and commercial fields alone Concurrently, with lower national a National Government at the end
and the excellent public reception to the use of air-conditioning wealth and income, the State debt of the war, although, of course;
where it has been used in the past.; Or you can point out cyclical has risen to stupendous figures. the remedies which he then pro¬
industries such as railroad equipments and mention the NEED FOR This latter is explained away, even posed are still not conceded. The
RAILROAD CARS, pointing out that hardly a day passes that the in apparently responsible quarters, Socialist Government is acutely
public press is not emphasizing the critical shortage that exists here. by the fact of so much of the debt aware that its idea of the achieve¬
If you happen .to have a handful of clippings from-the newspapers having been raised at a very low ment of prosperity by means of
and other business publications, you can offer a much more im¬ rate of interest, with redemption regulation and control has proved
insubstantial
as
fairyland,
pressive case for your viewpoint if you place them on,your prospect's dates skillfully fixed far ahead. as
desk. He can read them and you can quit talking—these articles will
But
every
student
of
finance without the latter's irridescent at¬
All is now presented as
make a better sales talk than you will make.
knows that mortgaging the future tractions.
No matter what you have to say, if you are trying to convey is a dangerous practice, that, in¬ prosaic, with the emphasis put
an idea to others, it is axiomatic that you need to know what YOU
deed, under such circumstances, upon; the necessity of increased
ARE TRYING TO SAY. i Then say it concisely and clearly. Economics the future has the knack of sud¬ production.
The hope official y
entertained is that the Govern¬
can! be a complicated subject if you disgress and start to roam around.
denly becoming the present in
The successful salesman .puts ideas into plain, simple language that some awkward and unanticipated ment's faults and failures will be
anyone
can
understand. If you tell your customers that certam problem. Supplementing the real¬ swallowed up and forgotten in, the
industries have a minimum of labor trouble, or that they own their ity of poverty is the illusion of midst of a huge volume of output
Indeed,
wealth.
There has never been so of goods and services.
.rees, iron ore, or natural gas, etc., that kind of plain talk is someovernight, responsibility
much money in Britain before— almost
ihing any business man can appreciate today. •
'DenmanTire & Rubber Co.^-Common
shedding
do without the rank
can
in fairness,
must,
Government As
much of its original program as
the
of entombment would be
consoling if it could be quite
that those who are to sleep
their last
,
disappointing income accounts in 1946.
th^n is the basis for a sales presentation concerning atfaetive industries—if you can control labor costs and material costs
lay you are in an enviable investment position.
as
purpose
where the price level is uncertain either
Here
so
existing government is not
encouraging. It is the case, as has
been said already, that the Social¬
activities.
used
been
have
amids
When the prices of commodities are
iv
own
The knowledge that
playing leap frog with each international conditions operating
in in those days would have beep
more
damaging to Collectivism
an upward or downward direction, companies THAT CAN CONTROL
THEIR OWN SOURCES OF RAW MATERIALS enjoy an advantage had it then been the ruling creed.
Nevertheless, he feels that he has,
over their competitors because they can stabilize basic costs and con¬
trol profit margins.
In this category you will find the chemicals, for the time being, lost a firm
to attack
some of
the fertilizer producers, producers of building materials foothold from which
owning their own forests, clay deposits, stone quarrys, etc., paper Socialist innovations.
companies owning timber reserves, mines, natural gas and oil com¬
The Riches of Poverty
panies, and the service companies. It was the slow-down in deliveries
of many raw materials and semi-finished parts that produced so
The most considerable effect
„
other from day to day, or
their
un-
der the
continue
widened
materially
to
to
Britain of her Empire, or
tance to
business men be¬ pect for increased production
bare will
the
tnat
come,
Thus, to give the matter point,
foremost in historical change is
the decline in economic impor¬
and Nature
since many
so,
'
.
■
.
outlook is for continued
ments
readjust¬
for ; those/
substitutes
as
fundamental alterations that can¬
not come
before political change.
Those modifications
include, if we
coin a needed word, a further
"austerilizing"
of
expenditures;
this time not least the gambling
may
outlays of the working < classes.
There will have to be a halt called
the
to
speculation
in
capital
values, a specu ation long since
divorced from the yields returned.
Rates of interest
if
-
sufficient
tracted
to
will have to rise
is to be at¬
money
government
securities
the. financing of fresh en¬
terprise. ; Further than this the
pronhet who is jealous of his rep¬
utation will not go at the moment.
and
to
Volume
THE COMMERCIAL & FINANCIAL
CHRONICLE
Number 4582
16S;
(180S)
Business
(Continued from
tories
and
of
kinds
all
farms
was
and
businesses
high in 1946
so
Prosperity in 1947
under
3)
page
and because wages and salaries
have advanced from prewar lev¬
of
the
socalled
such
out of line with costs, with the
prices of competing products, and
reconversion
as
*
While
in
price
effect
over
controls
the
supply offered
a
remained
strong temp¬
tation both to sell and to buy in the
black markets.
The inflexibility
ahead should be considered to be
most
demand
of
excess
desirable.
The
real
is that the Number One
danger
pressure
in this country—the profes¬
group
sional friends of the farmer—will
more or less
wage
it
demand.
The
black
markets
between
gitimate markets
Prices
rose
prices
distinction
and
le¬
wiped out.
markedly. Wholesale
was
24% between June and
rose
December
of
last
most of
occurring in farm prod¬
ucts and foods.
Consumer prices,
year,
this rise
the
or
cost
of
living,
about
rose
same period.
In
period of such good markets and
rising prices it is not surprising
that
also
wanted
everybody
job could have
a
who
ably
expect
boom
times
to
The
better
solu¬
tion would appear to be to let the
matter work itself out in a man¬
ner
which will
permit the public
generally to enjoy the benefits of
increased
productivity.
That
is
why letting
course
competition take its
is desirable. - If some pro¬
assortment
sumer's
balance in
reduce
mand
of
goods for the
dollar
only
can
con¬
restore
consumer
the
spending and
ridiculously high de¬
Indication of
1947
and
find
it
to
have
been
income
that
after
paying
people
saved
of
all
the
they
have
left
their taxes.
Since
before
the
at current prices then
have to cut prices, as
something like 8 to 10% of their
income, there is no margin left to
buy more goods than people are
buying now.
Therefore, if pro¬
duction increases by say 10% in
1947, there will not be enough in¬
to
come
Severe
take
the
increased
into better balance and
the level of prosperity
which we are enjoying.
Let us
then by all means resist govern¬
economy
fear
are
,
severe
is
business
the
basis
reces¬
for
so
often expressed that
in for trouble this year?
There is
which
one
school of
maintains
that
the
we
thought
every
pe¬
the
decline
in
the
stock
wages
and
this
condition
once
the
more.
CIO
is
Mr.
to
raise
Nathan
talking about
raising the wages of the 14,000,000
to 15,000,000 union members who
make
up
are
only about one-quarter
of the total number of
market
work
for
create
the
condition
complained
last September. We may
of and it would raise the
think, whether
the
a
question, I
decline in prices
at
are
fairly stable level.
a
hooves
businessmen
stand
be¬
government
at about
$150
compared with less than
billion in 1939.
So great a
backlogof
buying
lent
for
come
all
the
|
j
power
:
year's
a
people
Business
assets
I
has
It is equiva-
before existed.
to very nearly
never
to country.
their
and
now
billion
kept liquid
It
and
deposits
bonds
in
in^ »;
amount
to
now
'
the
holdings
of
$70
billion compared with
$20 billion
in. 1939.
This backlog of demand
merely one of' the aspects of
.
there
as
ment of.
a
different kind;
example, housing prices
If, for
are
suffi¬
was
in
there
buy considerably, more houses in
1947 than they did in
1946, then
fresh
the
increase
in
construction
will
provide jobs and income sufficient
to
which
come
might result from the
inventory accumulation.
stringency of
important of all*
Most
not in
was
ical
1920 the histor-"
experience
in
our
which
minds
is
learn from
An
v
a
It
should
be
appraisal of the business
today, therefore,- must
situation
in
connection with any discussion of
prospects
for
past affords
Both
ance.
this
year
that the
but limited guid¬
us
the
accumulation
of
needs and the money to buy the
goods
to
consideration
prices may have
that some prices
of
reached,
remembered
satisfy those needs
•
Balance
include
Guidance
T<*
history.
Approaching
peak
Past Furnishes No Absolute
still
today,
argue that history will repeat it¬
self is to argue that
people do not
offset the loss of jobs and in¬
decline in
1919-20 any
credit.
ciently attractive that contractors
choose to build and consumers to
that
the
been
haver
already declined, that other
decline, and that still
stop rising and level off.
dition
in
which
may
others may
The conty
anybody
could,
sell anything for any price within
reason and some
(Continued
are
things for prices*
on page
26)
1853
Itttitrft States <kmt
(£n«i}uuuj
18m IJork
of
STATEMENT OF CONDITION
March 31, 1947
RESOURCES
Cash and Due from Banks
.
TRUSTEES
..
$ 29,261,636.64
.
,
79,958,195.46
Loans and Discounts
24,842,065.72
United States Government
State and
Obligations
Municipal Obligations
.
8,490,000.00
.
Federal
Mortgages
.
840,000.00
!#.
.
3,961,207.62
.,
Banking House
Accrued
businesses
costs
employing
!,
-v;
BENJAMIN STRONG
3,225,000.00
Reserve Bank Stock
Real Estate
WILLIAMSON PELL
Chairman of the Board
President
Other Bonds
•
Interest
Receivable
Total
*
*
«
...
...
w
465,694.28
JOHN J. PHELPS
JOHN SLOANE
1,475,000.00
[.>
$152,518,799.72
[t;
JOHN P. WILSON
BARKLIE HENRY
GEORGE DE FOREST LORD
LIABILITIES
Capital Stock
people who
wages in this country.
Raising union wages is no solu¬
lowed by a period of rapidly fall¬ tion because it would
deprive the
ing prices. ■ This same
school great mass of American consumers
points to the warning of more of the benefits of increased
pro¬
difficult times to come implied in
ductivity which is presumed to
riod of rapidly rising prices dur¬
ing and after a great war is fol¬
1:
rising
in which inventories
one
CHARTERED
pro¬
prices.
correct
What
or that it will be
to shift from a period in
which inventories are
they
to preserve
war
again it is difficult to be¬
There is nothing so far in this
come
very depressed
about the
picture of record-breaking pro¬ situation. Robert
Nathan and the
duction, employment, income and CIO have
argued that the way to
wages that would lead one to ex¬
any
inventories
easy
holdings of currency
bank
a
Here
pect
of
been before.
Personal
$50
<
mean
duction off the market at current
Business Recession
sion.
no
probably greater than they have
ever
bankers to watch the growth of is
inventory with care and," above this period which makes it dif¬
they all, to avoid acdumulatioh of in¬ ferent from almost
any other pe¬
have always done in the
past. If ventory simply for the
purpose of riod of business uncertainty whichi
this line of action is taken we can
making a speculative profit on an we have experienced. Those who
anticipate such price reductions expected increase in
prices which are fond of drawing a parallel
as may be
necessary to bring bal¬ may not materialize.
-So far as between the period
immediately
ance
between incomes and
pro¬ the future- is
concerned,- the slow¬ following the First World War
duction.
Here again there is no
ing down of inventory accUjnula-r and, especially the crash of
1920„
reason
to
be
particularly con¬ tion, which results in an increase and the
present would do well to
cerned about the price reductions
in income without a
correspond¬ keep differences of this kind in
that may occur because
they are ing increase in sales of goods, can mind.
They should : remember
reductions necessary to bring the be offset
by an increase in invest¬ also that there is not now
will
History alone will render the
verdict, but there is a real possi¬
bility that if we look back upon
90%
No
is
"
to say that there
danger of Over-accumulation
ducers cannot sell their total out¬
put
for many non-essentials.
despite
weekly take-home pay in
manufacturing amounts now to
almost $47 per week, almost as
much as the average in the peak
month
of
January, 1945, when
workers were putting in four and
one-half hours more per week.
This average weekly take-home
of nearly $47 compares with an
average of about $25 in 1940.
£ •1
I do not
r
luxury spending, and in gambling.
Competition of a more normal
one.
average
get
process
last
year
of price readjustment we
the de¬
shall consider the price readjust¬
mobilization of a large part of the
ment to have been a healthy de¬
Army and Navy, amounted to the
velopment.
surprising total of only 2,000,000
What other basis is there for
persons in the latter part of the
year.
Contrast this figure of less expecting a readjustment in 1947?
than 2,000,000 with the total of Many have argued that consumers
are spending so much of their in¬
more than 7,000,000 in 1940. *
come
for current living that an
It is not surprising that under
increase in production and pro¬
circumstances in which business
ductivity which is expected this
is booming prices rising, and un¬
year is bound to produce a short¬
employment
at
a
minimum, age of
buying power at present
unions should demand
and
get prices.
This argument goes as
higher wages.
As a result of follows: Consumers are
spending
steady work and wage increases, now better than
Unemployment,
to
anyone
25
forever in the soft goods lines, in
15% during the
a
for
reason
again.
corresponding to the
increase.
price control, discriminating as try to block the forces of compe¬
did against the production of tition which are working toward
lower prices by extending subsidy ment support of union
pressure
some things,
for instance, stand¬
ard white shirts for men, and en¬ payments.
After the record pros¬ for higher wages.
couraging the production of other perity enjoyed by farmers during
Inventories
things for which profit margins the war, they should now be able
A third line of argument look¬
and willing to stand on their own
were higher, for example, wom¬
ing toward recession this year de¬
en's apparel, resulted in a great feet.
pends on rapid rise in inventories.
deal of distortion in the kinds of
Prices of Manufactured Goods
Inventories, they say, have in¬
production undertaken and in the
Out of Line
creased by about $7 billion during
supply of
goods to consumers.
The
prices
of
manufactured 1946.
Yet when we look at the
With the ending of price control
goods which are most out of line ratio of inventories to sales we
we
saw
happen what has hap¬ will, if
reduced, merely permit find that it is not even up to the
pened before both in this country consumers to save
enough on some prewar levels in most lines.
It
and abroad—the so-called laws of
of their purchases to buy some
may be true that inventories in
demand and supply went to work
of the new products which were some lines
are excessive and we
with vengeance on a great many
off the market during the war.
It have seen recently as evidence of
products, especially farm products will be difficult for consumers to
this a number of clearence sales in
and foods.
Demand was brought
continue to pay the prices which
the retail stores concentrated upon
into balance with supply, not pri¬
recently
prevailed
on
women's
marily because supply increased,
such items as furs, women's cloth¬
clothing, for instance, and still to
but
because
prices
rose
and
buy the new automobiles or re¬
pinched off a good part of the ex¬ frigerators. We
could not reason¬
Of
cessive
no
panicky about this natural
circumstances unionized workers to such an ex¬ of reduction of excessive inven¬
should be anything to give serious tent that their prices would have tories.
It
has
o c c u r e d
be¬
cause for alarm.
Many prices are to be increased by an amount fore and presumably it will occur
be unfortunate if it stops the de¬
automobiles, cline in the cost of living which
housing,
A reduction in
refrigerators,
washing has just started.
machines and the like.
the cost of living in the months
case
is
There
present
els, total income payments of all with the incomes of the people
kinds amounted to about $165 bil¬ who have to pay them. A decline
lion last year compared with about in farm prices and foods, for in$78 billion in 1940 the last prewar tance, would provide ah encourr
year.
aging
sign
that ' we 1 may
get
The high level of incomes and through
the
wage
negotiations
the backlog of savings in the form now being carried on in the mas6
of war bonds, currency holdings production industries without se¬
and bank deposits resulted in a rious
strikes
and
without
un¬
level of demand last year which reasonable wage increases.
The
made it impossible to supply all recent reversal of the down trend
the customers who wanted to buy. in farm prices under the influence
This was especially true in the of buying for foreign relief will
products
ing and men's sportswear.
Surplus Fund
Undivided
...
.
M
Profits
.
w
,
.
.
.
4,000,000.00
119,447,913.34
Interest, Expenses,
etc.
Unearned Discount
869,245.94
10,026.87
Payable April 1, 1947
.
Total
.
ROLAND L. REDMOND
HAMILTON HADLEY
2,824,414.45
1,017,199.12.
.
Deposits
Reserved for Taxes,
Dividend
$
24,000,000.00
>•
General Reserve
>
350,000.00
$152,518,79972
Securities carried at $10,085,000.00 have been pledged to
secure
United States Government War Loan Deposit of
FRANCIS T. P. PLIMPTON
G. FORREST BUTTERWORTH
JAMES H. BREWSTER, JR.
EDWIN S. S. SUNDERLAND
HERMAN FRASCH WHITON
JOHN M. HARLAN
•V'-K,;. v,
$7,656,224.25
and for other purposes as
required
or
permitted by law.
MEMBER FEDERAL DEPOSIT
INSURANCE
^ the
-7 i&:-f
H;" Tl'i.
WILLIAM A. W. STEWART
"
*
'.J;.
of
?
1
CORPORATION
It;
<Ys
436,000,000
11994430526
73%
Stocks
Bank and Insurance
of
ments;
E.
By
DEUSEN=
VAN
A.
This Week
be appearing in the
newspapers
It may be of inter¬
est, therefore, to survey briefly the trend of deposits, loans, govern¬
ment securities, etc., as they have been presented each week by the
New York Clearing House Association and the Federal Reserve Bank
balance sheet statements will
by the time this column is published.
The trend of
deposits for New York
,
Clearing House banks since
is as follows:
the first of the year
Demand
-
v
Total
Time
'
-•
,
„
($006,000)
composite character, in terms of determinable. Earning assets are
potential earning rate, has im¬ averaged for the four quarterly
reports of each year.
proved.
Jan.
21,786
21,503
2, 1947
Mar.
20, 1947.
1,397
-
Change (%)
283
-
-
V The decline,
with
a
-
290
—
1.2%
0.5%
—
slight; but compared
substantial drop as the following
it will be noted, has been very
year ago,
there has been a
figures show:
■
.
.
.
.
_
J
,
Total
Time
Demand
($000,000)
»
.
25,982
Mar. 20, 1947.
......
1,251
27,233
21,503
Mar. 21,1946
1,397
22,900
4,479
146
Change ($)
./
7
—
1.3%
—
Change (%)
—
+
-f
17.2%
1.2%
4,333
15.9%
Further analysis of the figures discloses, however, that this drop
been confined to government deposits, which now aggregate
;
has
$642,000,000 against nearly $6 billion a year ago.
Mar. 20, 1947
Commercial
on
deposits,
demand
the other hand, are
and time deposits are
4% higher,
1.2% high¬
Before the end of March, gov¬
er.
deposits will experience
Treas¬
ury call on the banks to repay
20% of Treasury balances held as
ernment
further shrinkage due to a
March
of
which
of
26 at close of business,
needed for redemption
are
billion of certificates on
$1.5
April 1.
Total loans and
reporting
ber
investments of
Federal Reserve Mem¬
in New York, have
Banks
19%
and now are about
lower than a year ago.
Earning
Discounts
Assets
Earnings
Assets
14,687,269
'15,528,045
13,619,606
billion
earning
of
return
net
assets
higher,
an
expansion
against
0.60%
rate
of
net
in
the
face
of
a
21.0%
ing expenses.
that
served
of
expenses
salaries,
and
wages
Mar.
1946
26. 1947
»
V
»
4?
c.
—2,408
Change %
—75.6
!
783
776
Change $
Agric.,
641
i
2,971
.
6,796
Short Term
5,542
4,157
5,716
2,292
1,186
—1,080
—3,250
+ 142
>.
Total
+
+ 22.1
+ 40.0
|l:
rales
the
—15.9
—58.6
and
States
at
least
who consider
us
of
persons
private
which
so
our¬
If
system
will.
enterprise
hold
we
good
dear is to
sur¬
when
those
charged on commercial bor¬
rowings,
has
as
been
strongly
urged by Morris A Shapiro, then
could show moder¬
bank earnings
ate
substantial improvement.
to
statements will be
First quarter
special interest this
studied with
o
em¬
else, the private en¬
the
to
which
will
support
a
isfactory to labor, with an oppor¬
tunity for
a
Ours is the
fair return to capital.
responsibility. Ours is
opportunity and if we miss
opportunity we will have
the
missed
the organiza¬
according
affairs,
its
sonably full employment exists at
wages
this
left by plane for Europe on
Mar. 24 to wind up
to
standard of living reasonably sat¬
chance.
our
Churchill, in his speech
Winston
before the House of Commons on
Aug. 16, 1945, giving his final reRook" said that UNRRA v;ew of the war and his first
major speech as leader of the
had distributed goods valued at
Opposition,
described thus our
$2,500,000,000 overseas. The Gen¬ opportunities and responsibilities.
"Times" of March 25.
eral, who will be abroad about six
He
22,765
weeks, is to report in June at the
at this
12,694
18,410
final
768
—4,355
Total Loans
Invsts.
& Investments
13,462
23
+
industry
ployees.
General
1,123
—0.5
Jan. 1,
New York
+
48
of
relation
terprise system to be successful
must
support
a
free economy.
This is only possible where rea¬
Rook in Europe to
tion's
Total
9,279
the relations between
with
do
to
nations, with the individual liber¬
ties of the citizens and the fair
Above all
some econ-
1,100
9,327
we should give attention to
questions which bear on the
survival of private enterprise as
a
system
supporting what we
understand as being the American
way of life. These questions have
year.
banking set-up
Others
U.S.G. Bonds
—
United
left
world, should be heartening
those of
interest
increase
should
somewhere
U.S.G.
Comm. &
Misc.
3,184
of the
.75
possible, and the
seems
as
banks
that
indicates
in the
loans aggregate $13,-
did not expand as great¬
did
as
which
Investments-
etc.
Date
Mar. 27,
ates,
average
(In billions of dollars)
'■
—
the
the
vive the test, and the present situ¬
payroll increase over 1945 and a
7.6% increase in overall operat¬
Today, government bonds plus
.
R. E. Si
selves
.59
.30
And this
return was
achieved
ly
Brokers
Securities
110,954
123,676
127,819
afraid to
?
""
.
to
.61
.56
Investments—Reporting Member Banks, New York
,
"■
.63
21,307,640
spending
are
expanded omies and improved efficiencies ation constitutes a test, its friends
through the war years, especially have been introduced.
must
accept
the responsibility
in the category of government se¬
If these trends persist through which rests upon their shoulders.
curities which reflected the war 1947, viz: increase of commercial When most of the decisions were
financing program, net return on loans, steadiness in volume of made in the bureaus in Washing¬
earning assets melted away from government bonds, improvements ton or by governmental^ offices
nearly 1 % to little more than Vz in efficiency and economy of op¬ and agencies, the responsibilities
of 1%, on account of abnormally erations,
(in the face of • salary of the businessmen were not as
low interest rates, and the large increases), then it would appear
great as they are today.
Private
proportion of short-term financ¬ that net ooerating earnings in industry as represented and in¬
ing.
It is significant, however, 1947 need not decline greatly if fluenced by this group must and
that in 1946, the first full year
should now rise or fall, sink or
at all, from those of 1946. And if,
since V-J Day,
this downward
swim, on the basis of the judg¬
trend appears to have been re¬ in addition, upward adjustment of ment of its own management.
short-term interest rates eventu¬
versed, for the 15 banks showed a
I
believe the time has come
40%.
—Loans—
«
.86
127,686
in
from
away
96,020
22,876,510
deficit
we
significant turn of the public
sentiment
.94
18,251,830
20,837,823
our
sustained
83,328
6,222,336'
8,912,343
12,814,688
lose
the
86,154
90,741
8,844,163
10,040,536
12,174,380
15,347,780
we
to government
towards the middle, in contrast to
the sentiment in every other part
%
2,980,883
3,001,830
3,589,324
3,807,242
4,061,150
4,857,748
5,912,328'
4,353,362
5,390,965
6,908,512
;
($000)
($000)
($000)
($000)
in prices
return to
It will be a
a
adjustments necessary
prosperity under a
competitive private enterprise
system.
rate of profits to the banks (loans, pointed out, combined with some End UNRRA
to
firming
of
interest
brokers, etc. and short-term scattered
Major General Lowell Rook, re¬
government
paper), while the rates, undoubtedly accounts for tired United States Army officer
higher yield government bonds this
improvement in the average who has been Director General of
have suffered approximately no
earning rate. It is also interest¬ the United Nations Relief and Re¬
shrinkage, and the more profit¬
able commercial loans are $1,186 ing to note that overall operating habilitation Administration since
the earn¬ commercial
Loans &
Annual Oper.
those items which return a lower
This does
not imply, however, that
Earning
It will also be ob¬
total earn¬
ing power of the banks is 19% ing assets were lower in 1946 by
less than it was.
An analysis of more than $1.5 billion dollars, or
the total figures is quite reveal¬
approximately
7.0%,
but
that
ing in this respect, as per the total net operating earnings were
figures in the table below.
fractionally higher.
It
is
very
evident that the
The changing composite charac¬
principal shrinkage has been in ter of
earning assets, as already
shrunk 2.5% since the first of the
year,
Loans and
Securities
higher
25;982
21,786
21,503
20,017
21,206
20,861
5,966
580
642
Mar. 21, 1946
Jan.
2, 1947
Return on
U. S. G.
0.56% the previous year.
($000,000)
Others
Total
Deposits
make
A
Total Net
turn
relief
by
merely because
Net
Year—
Demand Deposits
U. S.
but their
lower,
are
figures
and
loans
Total
As
Change ($)
total
and
courage
for
the fact still remains
banks'
readjustment
production, with
competitive selling.
bad year for us all if
used are net operating
earnings,
exclusive of security
profits and recoveries, so far as
course
the
1S44__
23,190
22,900
1,404
they consti¬
ago,
year
investments
First quarter
of New York.
a
siderable
and
ing
for
that
Bank Stocks
—
Turning to the record of earn¬
assets
and earnings
of a
group of
15 leading New York
City banks, a rather interesting
fact
is
brought out.
Earnings
a
tuted 54%.
Of
=
$12,298,000,000
vs.
Today they constitute
total loans and invest¬
ago.
year
Thursday, April 3, 1947
FINANCIAL CHRONICLE
THE COMMERCIAL &
iS.. (1806)
2.0
—
—5.7
—
the
of
meeting
UNRRA the
Council in Washington.
19.2
said, The United States stand
moment at the
should be
so.
summit of
rejoice
I
world.
that
this
Let them act upon to
the level of their power
and their
responsibility, not for themselves
Business
Prosperity in 1947
(Continued
beyond
anced
will
has passed. We are
approacing a more bal¬
reason
rapidly
condition
once more
compete
Will
to
come
which
sellers
have to go out and
get
as
in
the
business.
shock
It
to
some
businessmen, spoiled by almost 10
years of continuous upward ad¬
vance in prices and volume, that
there will be some difficulty in
increasing
volume further
and
£
that all their talents for improving;
quality and shaving prices may be
necessary to maintain their com¬
It will come as
petitive position.
a
shock to others to find that the
competitive system is
a
system of
from page
competition they will be giving to
public better values for the
public's money.
the
let
if
1948
as
leave
me
large
as
we
had
will have
over
with
of
this
a
25%,
an
thought:
have
should
we
Even
1947
and
business recession
a
in
in
1920
and
1921
we
drop in income of not
which
will
leave
us
annual level of income of
sublime
a
day
human history.
moment
in
the
opportunities.
preme
an
a
There is not
hour to be wasted; there is not
day to be
lost."
These last two
decades will go
down
into history as the decades
when
minorities and pressure
had tremendous power
our opportunity.
The time
groups
1941.
After adjustment for price
changes such a drop would still
has
income consider¬
the
level enjoyed in
pressure
us
with
an
the
over
1941, the highest peacetime year the
I want to repeat
before the War.
come
when we must organize
majority
to
withstand
their
such
By organizing
majority I do not mean that it
groups.
in one organi¬
should be organized
efficiency,
raising the quality of their prod¬
ucts and exerting real, selling ef¬
improving
to
brighter
a
pilgrimage has brought
Our
.
us
about $130 billion compared with
the $93 billion which we had in
ably above
faced with the uncomfortable task
.
.
upon
case some
of profitable operation to fall into
They will be
then
dawn
may
From the
people are not history of the world.
convinced of the desirability of least
to the
greatest, all must
the adjustments which appear to
strive to be worthy of these su¬
be indicated by what I have said,
Just in
leave
loss category!
others, for all men in all
and
25)
profit and loss and that their turn
has come after a good many years
the
but for
lands
at this point, however,
that so
large a drop in income appears to zation, but that the many several
be
improbable
because
of the organizations such as your own in
fort./ Workers will likewise be backlog of liquid assets and the
all parts of the country should or¬
faced once more with the choice
potentiality of consumer credit
of earning all their pay or losing
expansion coupled with the real ganize to defend the rights and
it.'
They may be comforted but need of consumers, all of which opportunities of the majority of
slightly by reflecting that they are of a
magnifjide .Mg.greyer m ■ Beanie-.. Othe^e, we shall
are
doing precisely What ishe- than they were i'nf92dC"
not be able to make conquest of
quired under a private enterprise
This year can be the first of
our future as a nation and hand
system to justify the continued
•
if we face
courageously and
many prosperous years
existence
that
and
system.
strengthening
of
Under the spur of
our
problems
lick them.
The outlook is for con¬
down
to
our
descendants
blessings we hold so dear.
i
the
Volume
165
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4582
LIFE
NEW YORK
A
INSURANCE
and Beneficiaries aggregated
Of this amount, living policyholders received
loans
Policyholders
to
$189,794,091 in 1946.
Policyholders
residences for amounts of less than $10,000,
aggregating
During 1946 the Company made 3,445 new mort¬
gage loans aggregating $46,785,930. Of these, 1,721 were mortgage
loans to veterans amounting to $12,009,039.
At the beginning of
1947, the Company had mortgage loan engagements in excess of
$41,000,000 which it expects to consummate during the current
lAfe Insurance in Force at the end of 1946, under 3,561,355
policies, totalled $8,543,308,415, the largest amount in the Com¬
pany's history. The gain in insurance in force last year, amounting
to $564,115,313, was greater than in any previous year.
per
III|f
~
on
$107,164,200.
received $79,501,064. -;V'5--—^;
Sales of New Life Insurance during 1946
The increase over the previous year was
•
X
'
year.
f,
■
y.
'
i
V
•
totalled $832,484,000.
$268,303,900, or 47.5
M
" y *'
~
^
-.v
'7. J
«" ''•••%", '- 'f' f'A ••••'.' ''V
h. f-' • * *v'
j
..
.*
■VM #
Stanworth, at Princeton, New Jersey, with 150 apartments, and
Fresh Meadows, at Queens, Long Island, New 'York, with about
'
>.
/
■>.
3,000 apartments and also shopping and other facilities for a
Company's life insurance
other obligations, totalled
Assets, held for the protection of the
annuity contracts and to meet
$4,026,689,280 at the end of 1946.
The assets exceeded the
and other liabilities by $231,038,632, which
amount constitutes the Company's Surplus Funds held for general
contingencies.
Company's
community of
Reserves
reserves
Holdings of Bonds at the close of 1946 aggregated $3,317,261,757,
82 per cent of total assets.
Of these bonds, United States
Government obligations comprised 61 per cent of total assets;
or
per
10,000 people.
>
■
i,
*
lyr.'fc *>>,-
;
Company9s Contractual Obligations
All of these reserves
are now computed on an interest basis of 2% per cent or lower.
This action has been taken to protect the interests of the Com¬
pany's policyholders in view of the continued low yields from the
highest quality of investments.
against the
The Provision
cent; railroad bonds, 5 per cent;
Canadian bonds, 2 per cent; municipal bonds, 1 per cent, and
industrial and miscellaneous bonds, 4- per cent.
Holdings of
public utility bonds, 9
some
further strengthened at the end of 1946.
were
_
'■
'
Rental Housing provided a new medium for the investment of
the Company's funds.
Two developments were started in 1946:
cent.
and
27
COMPANY
Brief Review of the
102nd Annual Statement to its
Payments
(1807)'
with $38,895,341
pany
■
vM
A J- y
for 1947 Dividends is $41,730,229 as compared
for 1946. The New York Life is a mutual com¬
paying dividends to policyholders only.
preferred and guaranteed stocks amounted to 2 per cent of total
To Serve
assets.
tains 126 Branch Offices in
of
Increased Corporate Investments
in 1946 reflected the growing
industry. During the second half
the Company's holdings of investments in corporate
over
Policyholders and the Public, the Company main¬
principal cities and a sales organization
5,600 agents throughout the United States and Canada.
'ijV\
demand for funds by private
of the year,
securities increased $118,521,671.
Holdings, of First Mortgages on Real Estate were valued at
$335,772,452 at the end of the year. There were 26,980 mortgage
STATEMENT
President
OF
CONDITION
December 31,
1946
LIABILITIES
ASSETS
Cash
on
hand
or
in hanks
•
$
38,342,771
Reserve for Insurance and
fi
<
Computed at 2lA% interest......
82,786,048
Canadian
33,438,208 >3,317,261,757
Municipal
Railroad
205,425,039
Public Utility
358,932,660
Industrial and Miscellaneous......
159,821,440,
335,772,452
:.. 'X
Reserve for future payments
Contracts
Housing and
under Supplementary
Provision for 1947 Dividends to
Reserve for Premiums
Policy Claims in
$10,948,406
Properties for Company use
for claims not
22,844,741
6,866,082
338,809,469
196,523,634
vVk.i#
41,730,229
policyholders....»
36,187,751
paid in advance..,
course
>•«•»»•
iii
of settlement and provision
14,187,664
reported
r'r'ilt
5,548,439
Reserve for other Insurance Liabilities
,
ill'
I
Provision for Taxes
Business
5,030,253
Propertiiis
'
,i4
Heal Estate
Foreclosed Properties, including
$562,267 under Contract of Sale..
Liier
-h>J-
u
97,414,289
Heal Estate:
Rental
553,288,639,
Reserve for Dividends left with the Company
Stocks, preterm! and guaranteed
First Mortgages on
386,544,029
Computed at 2% interest
$2,476,858,362
tions
$2,212,312,214
$3,152,144,882
United States Government Obliga¬
M
Annuity Contracts:
Computed at 2%% interest
Bonds:
156,634,001
Policy Loans.
Interest and Rents due and accrued
Miscellaneous Liabilities.
3,452,953
22,133,885
Deferred and uncollected Premiums (net)
7,065,627 *
:Vt-
"ii
i3
34,576,950
1,708,434.
Other Assets
$3,795,650,648
TOTAL LIABILITIES
Surplus Funds held for general contingencies......
$4,026,689,280
$4,026,689,280
Of the Securities listed- in the above statement; Securities -valued at
$55,956,374
are
depositwl with Governments and States as required
231,038,632
-
.
.
.
«
.
%
by law.
The
-
Company started business on April 12, 1845.
The Statement
A
more
•
It has always been mutual and is incorporated under the laws of the State of New. York.
with the New York State Insurance Department.
of Condition shown above is in accordance-with the Annual Statement filed
complete report will gladly be.sent upon request.
A
W,
.
In addition to further details on the Company's,
v
operations during 1946, it discusses a number of recent developments believed to be of particular interest to
policyholders. These include the Company's entrance into the housing field, the welcome return of hundreds
of veterans to the New York Life organization, the serious rising trend of fatal automobile accidents, and a few
examples from the
human needs.
many
thousands of actual cases during the past year showing how life insurance serves
obtained by writing to the New York Life Insurance Company, 51 Madison
?
A copy may be
Avenue, New York 10, New York.
,/*
v u\
'
-
""V'r
;
»■'
•
hl\il .-Trtll&li
aw
S
.<r/juav3.p
'fj
ill!sH :.0*S
iL
,soif jcl mil
'inay ■>»
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>rv
THE
COMMERCIAL & FINANCIAL
Thursday, April 3, 1947
CHRONICLE
(1808)
28
million in 1939 and 46 million,
of
Maintaining Prosperity—Roles
Management and Government
2)
(Continued from page
have to disavow any concern
government policy,
present
any
with
desire to change any such
policy, and any wish to substitute
any other policy* I take it that
there is no such person in this
any
me
with
fundamentally
inconsisten
the
whole character and
that
rate
It
enterprise
spirit of American
utterly incongruous
businessmen in their sepa¬
and individual undertakings
to me
seems
project
their
persona
extremists, the true plans for 15 or 25 years ahead
while at the same time ignoring
concern of thoughtful citizens
is
consideration of nation-wide eco¬
to achieve and maintain that prop¬
nomic events which could sweep
ter proportion of private enterprise
away the savings of a life-timeand public action which will safe¬
just because these events are no
guard our traditional freedoms,
going to occur in 1949 or 1950.
assure our, social contentment, arid
All that is needed to arouse the
make for our economic prosperity.
spirit
of
American
business
J^est you fear that I am indulging
against this perilous apathy is
only in generalities, I shall shortly full realization of what another
propose to you a specific formula
major depression would mean.
for this blend of private and pub¬
Ins our domestic economy, an¬
lic action, which I hope will meet
audience.
should
Aside from
„
in
affected also by the
and they are
of labor organizations.
actions
1929.
| enterprise and so that each such
(activity will play its-part in bal¬
rather than unbalancing
So long as we retain our free ancing
the economy.
the system, there will never be com-;
For these reasons, there must
agreement between man¬
war, the effects of which are not plete
be some intelligent integration of
yet fully revealed, and we may agement and labor regarding the
relationship, private business policy and pub¬
be on the threshold of the utiliza¬ wage - price - profit
lic policy.
Both, affect the flow
tion of new types of power which and some of these disagreements
and distribution of national in¬
will create a veritable Twentieth will continue to be settled by the
relative strength of the parties. come, and consequently both have
Century industrial revolution.
Within
a
decade
or
two or But the hope of the private en¬ an influence upon maintaining na¬
tional prosperity.
three, we may achieve the capac¬ terprise system rests upon a di¬
This definition of areas of pri¬
ity to produce twice as much per minishing use of force, and upon
vate and public concern and action
capita as we were able to produce increasing knowledge and accept¬
raises the further question: "How
in the best years before the war. ance regarding those wage-pricerelationships which will are the series of private and gov¬
But none of these gains remove profit
gains in tech¬
made
have
We
nology and invention during
the contrary they
—on
accentuate
problem
of
maintaining
maximum employment and pros¬
—the
and
production
maintain
con¬
sumption in balance at the high¬
est feasible levels, and, therefore,
contribute to the long-run bene¬
For the more we increase
capacity to produce, the more fit of both management and labor.
realistically we must face-up to
While
both management and
the problem of distribution—the labor have a job to do in gaining
this knowledge and m its appli¬
problem of balancing productive
capacity on the one side with a cation,
management is in the
market for the products on the strategic
position to take the
other. We want to avoid a seller's leadership
in this field.
Both
perity.
our
ernmental
fields
ous
actions
to
in
these
blended
be
vari¬
into
a
symphony rather than allowed to
deteriorate
into
a
mass
of crash¬
ing discords?"
There
is
nothing
totalitarian
looking at the whole pic¬
ture before deciding what to do.
There is no excessive emphasis
about
the role of government in
that
the
government
upon
insisting
In re¬
market with inflation, or a buy¬ prices and wages are determined
depression would er's market with deflation. We in the first instance by manage¬ ality, one of the most frequent
with your
approval and elicit
bring
untold human
suffering, want to stimulate and sustain ment, although the actions of la¬ criticisms of government emanat¬
your cooperation.
and losses of staggering billions of maximum employment and maxi¬ bor have an important infuence ing from conservative business¬
men
has been that the various
dollars.
At
the very
least, it mum production through an ade¬
Outlook for Prosperity
upon both.
Management, by and
would
incite
more
government quate supply of purchasing power,
things done by the government
large, is acclimated to the study
On the outlook for prosperity,
intervention in the economy than so
distributed
throughout, the of economic conditions. It needs have not been consistent—with
the
concensus
in the business
consequent
lack
of the
sta¬
any of us here would like to con¬ economy that demand and sup¬
only to raise its sights to the
world today, I think, shapes up
template. At its worst, it could ply are kept in balance at the broader
considerations
of
sus¬ bility to be derived from a dis¬
something like this: There is a
cernible
policy or pattern.
In
shake to the foundations both our highest feasible levels.
tained
economic
prosperity
v.
feeling that there may be some
form of enterprise and our form of
short, there has been a felt lack
recession in business activity in
against the more limited consid
Maintaining Maximum
of instrumentalities for the ra¬
erations of immediate profit and
1947 or 1948.
There is also the government. Only those who se¬
Employment
tionalization of policy. This lack
cretly or openly would like to see
loss.
feeling that basic economic con¬
has become more conspicuous as
these
forms
changed
beyond
There is more agreement than
There
is nothing novel about
ditions are so favorable that this
events have drawn the govern¬
recognition can view such a pros¬ is
commonly
supposed
among this idea.
Management has al¬
recession, if it comes, will be of
The more economists and businessmen as to ways made market studies. All ment into an increasing prolifera¬
minor scope and short duration, pect with equanimity.
conservative one is, in the best the core requirements for main¬ that is now proposed is that these tion of activities*
and that after it is over we shall
sense of thjat term, the more anx¬
taining
maximum
production, market studies be broadened to
fiave several years of high pros¬
The Employment Act of 1946
ious one becomes to avert such a maximum employment, and maxi¬ include all of the factors which
perity.
The Employment Act of 1946 is
mum
purchasing power. Risking affect the market—those factors
I share the opinion that, if there shaking-up.
When we think of the rest of the danger of over-simplification, which affect it in the long run designed to focus the attention of
is such recession, we shall get
the world, we become even more I would say that this core re¬ as well as those factors which af¬ industry, agriculture,
labor and
-over it without too much trouble
concerned about what a large de¬ quirement is to maintain equilib¬ fect it in the short run.
government upon the goal of con¬
and move on to several years of
major
other
liigh prosperity. However, I do
not regard such a recession as in¬
evitable and, contrary, to those
who think/ that the longer it is
postponed the more serious it will
t>e, I think that the longer it is
postponed the more likely we are
to avoid this intermediate reces¬
sion entirely. We have been re/. markably fortunate on the whole,
•despite some difficulties, in the
.speed of our shift from war pro¬
duction to
If
so
we
can
production; and
get by another year or
peace
without the kind qf trouble we
in 1920, and 1921, it is v/ell
liad
within
the
possibility
enjoy some further
range
that we may
of
years
.
whether
primarily
upon
prices
industrial
and
prices adjust themselves with
.sufficient speed and sensitivity: to
levels at which continuous high
consumer
demand can be main¬
tained. For if these adjustments
are made wisely and well, I think
that businessmen who are watch-
farm
ing the economy carefully will
retain that confidence of outlook
necessary
umes
|Jf
i
would
do.
be¬
want
specific proposals, we must all be to use it for additional produc¬
in agreement that America for its tion in order to earn still more
own safety
and protection has a income, and -those who use it or
tremendous stake in the growth want to use it as consumers for
of free institutions rather than to¬ the satisfaction of the wants and
talitarianism overseas. And what¬ niceties of life. The quantitative
ever
methods may be employed factors in this equilibrium, and
toward this end, nothing will be the means of obtaining it, are not
half so important as the example matters of agreement.
But there
right here in America that our is more general agreement that
free enterprise system works suc¬ the
job has not been done well
cessfully—without periodic break¬ enough in the past, and that it
down
or
not
all agree
we
demoralization.
That
on
ex¬
would serve as a beacon
light from pole to pole.
ample
informed
best
the
know-that
of
avoidance
for sustained high vol¬
My main emphasis
on
,
this
extension of free institutions
other
since
parts of the world; and
I believe that freedom is as
important
as
peace,
and
that
peace cannot be maintained enduringly without freedom, it fol¬
lows that maintaining American
prosperity is
cornerstone of the
a
edifice of world peace.
But these reasons for •maintain¬
ing
prosperity,
urgent
though
they are, are after all on the
negative side. There is an affirm¬
of business- investment.
Long-Range Problem
America is abso¬
lutely central'to the preservation
in
oc¬
casion, however, is not upon the
fairly immediate economic out-,
look.
My main emphasis relates
to another opinion commonly held
by businessmen. This is the opin¬
ion that after a few years of high
prosperity, with or without an in¬
termediate recession coming first,"
we
shall be in for another big
depression—as big or bigger than
the one that started in 1929.
It is this fatalistic pessimism re¬
garding the economic outlook five
/or seven or 10 years hence that I
desire most vigorously to chal¬
lenge.
ative side
as
The individual
well.
businessman
is
not
that if
we
face-up to
long-range
problem
now,
and commence to prepare for the
this long-range prob¬
lem because the danger is five or
iseven or 10 years away seems to
more
This
equilibrium is sometimes
supply and de¬
in balance. It is sometimes
maintaining
production
called
consumption in balance. It is
sometimes
referred
to
as
the
and
problem of distribution or the
problem of purchasing power. All
of these terms are different modes
identifying the same problem.
of
Enterprise
responsibility
for
of this probem of economic equilibrium does
not rest with the government.
It
rests with our system of private
solution
better
enterprise, embracing the actions
of businessmen, workers, farmers
and consumers.
It rests mainly
cent
war
with
increases
in
the
size and capacity of our economy
which
exceed
agination 10
any
flights of im¬
years ago.
We
had
a
$164 billion
national
income
of
a year
trasted with
We have
now
almost 58 million
whether
price
and
wage
policies are made with wisdom
and foresight and temperance, and
with a
sound understanding of
heir
eral
in
for
profound effect upon gen¬
levels of economic activity
the longer run and not only
the
moment of quick
but
ransitory gain.
We all know now
and prices are not deermined
automatically
by
the
rules which Adam Smith wrote
hat wages
more
are
than
170
years
ago.
They
determined in large measure
the
people employed, exclusive of the
by
armed
actions
forces, contrasted with 45
these
conscious
and deliberate
of business organizations,
of
one
the
employment,
maximum
tinuous
and upon the methods of obtain¬
the
ing it.
present situation is the extent to
The
law
divides
into
three
which management concerns and
parts. First, it requires that the
management
organizations
are
President submit to the Congress
making these broader inquiries as
at the commencement of each reg¬
a
springboard for putting them
ular session an Economic Report.
into
aspects of
encouraging
practice.
While
This
should
government
the
certainly keep out of the regula¬
tion of prices and wages, there
well be aids which the gov¬
ernment can extend cooperatively
may
enterprise in making
general studies of nation¬
wide conditions, and the workings
of
the
economy.
These would
to
private
these
with
management
provide
some
and standards in the de¬
of
basic
economic
guides
termination
These aids by the gov^
ernment might be likened to the
sending out of weather' reports
although the government does not
require anyone to take shelter
policy.
from the storm.
The
ing
those
be
will
for
up
to
less
the
fiscal
for
the
or
of
purpose
im¬
policies within
development of
believe
the
proved
economic
enterprise system is a
far-reaching method of at¬
free
stability than
governmental devices.
taining
economic
the
of
use
Nonetheless,
there
avoided.
be
taxation,
national
certain
which can¬
are
banking, the estab¬
of regulatory activi¬
ties, and public spending for cer¬
lished types
well
tain
such
cial
-
established
national
as
security.
In
purposes
defense and
are
as
to
their
time to time.
it
is
And
although
differences of opin¬
inescapable,
there may be
ion
so¬
aggregate,
the
these activities are immense.
they
exact
size
from
This being the case,
all-important that the
gov¬
carefully measure the ef¬
of these activities upon the
ernment
fects
whole
them
toward
promoting maximum employ¬
ment, production and purchasing
power.
Second, the law estab¬
lishes a three-member Council of
Economic Advisers to assist the
year,
in
the
preparation of
work¬
to engage in related
And, third, the law
a Joint
Committee
activi¬
estab¬
within
the
Congress,
composed of 14
members drawn equally from the
Senate and the House. The func¬
tion of this Committee is to re¬
ceive the Economic Report, study
it, and file a report appraising
its recommendations for the guid¬
ance
of the various
legislative
committees. Putting aside embel¬
lishments, this is all there is to
ties.
lishes
the law.
The Council
economy
that
and
maximum
ers, as
include
These
and
money
.
seeking to work; and also
of Economic
Advis¬
operates undqr
this Law. It constitutes a specific
the management of the agency of the government, di¬
debt, certain phases of vorced from a special interest in
government programs
not
out the policy of the Act.
policy is aimed toward creat¬
ing and maintaining conditions
affording employment opportuni¬
ties for those able, willing and
permanently throughout the
add
straightening out real or supposed
disturbances in the economy.
I
more
This
ing
making
and
which
compensatory devices by the gov¬
the
ing
Economic Report and,
our
equilibrium,
ernment
ing upon the economy, and spe¬
recommendations for carry¬
cific
President
factors
there
need
apprais¬
government programs bear¬
of
the
decisions
economic
discussion of trends, an
al
busi¬
successful
system
these
speaking,
of the state
economic health,
a survey
Nation's
the
of
a
broadly
^Report,
must contain
becomes in discern¬
more
ness
main
The
the
that
add
should
I
most
Solution Rests on System of Free
concerned
and $83.3
To ignore
done
in the area of price and wage
with avoiding
losses or policy, because the relationship
bankruptcy. He is more general¬ )etween these two items mainly
ly concerned with expanding his determines whether businessmen
sales, enlarging his prospects, and earn enough profits to stimulate
enhancing his earnings. The most productive initiative and whether
important reason for maintaining consumers have enough income to
prosperity is that to do so would buy the products as rapidly as
assure levels of business prosper¬
hey are produced.
ity
and
national
progress
far
The future of our prosperity,
above historic analogy.
he future of our free enterprise
We have emerged from the re¬
system,
depend largely upon
in 1946, con¬
$70.8 billion in 1939
billion in the peak pros¬
future before we are up to our
necks in difficulties, we can avert perity year 1929. Even after al¬
another
catastrophic
depression lowing for 'the changes in the
vihrough moderate measures—pro¬ price level, we are now producing
about 50% more per capita than
vided
that- these
measures
are
we ever did before the wan .■■-.vtaken ori
this
or
solely
,
I believe
be
should
it
satisfactorily in the future.
mand
world
of depression in
and
use
called maintaining
Must Avoid Depression
Those
those who
and
can
flow of income
the
in
rium
tween
,
.
This will depend
■
or
events
t§®§
America
in
Whether
going an intermediate reces-
jsion.
/
pression
of prosperity without first
*mdei
should think before it acts.
so
conduct
encourage¬
ment will be accorded to
private
any
in
I have, said,
particular program or
order
gress
that it may
policy,
objectively
President, the Con¬
and the country, in apprais¬
service
the
ing and developing
nomic policy.
The tasks
over-all eco¬
of the Council
require
obvious practices:
First, it must draw upon the
resources
and thinking of the
various government departments
operating in the economic area.
It must not duplicate their spe¬
of it Certain
cialized work.
of
synthesis.
Council needs skillIts ta#k is one
interpretation and
Second, the
Volume 165
Number 4582
THE COMMERCIAL & FINANCIAL CHRONICLE
fully and temperately to cu'tivate
relations with the economic world
outside
Its
the
governmental sphere.
central
health
task
and
is
plement
to
to
this
only
to
the
study
problems of
eral economy—and
our
evaluate
the
doing and thinking; but what
infinitely more important, the
Council
should
draw
upon
the
thinking and attitudes of these
groups in formulating its own rec¬
ommendations.
Through these series of rela¬
tionships there are, we hope, pros¬
pects
for
moving
appreciably
toward national economic policies
which broaden the areas of agree¬
narrow the areas of dif¬
ference, among various segments
of our American society.
In the
long run, increasing unity about
ment, and
fundamentals
progress.
is
The
program
for
the
Spring
Meeting of the Association of Na¬
tional
Advertisers
has
been
an¬
nounced
by William N. Connolly,
Advertising Manager of S. C.John¬
son & Son,
Inc., and Chairmen of
the Association's Program Com¬
mittee.
be held
The
on
meeting, which will
April 7, 8 and 9 at the
Hotel Drake in
Chicago, Mr. Con¬
nolly said, has been patterned
on
has
program
bjeen built around measuring advertising results and ing CounciL R. J. Canniff, Servel,
On Monday, Apr. merchandising advertising to
Inc. and Earle B, Savage, Jr. Gen¬
7, members will, have an oppor^ salesmen and dealers; Jack Kurie
eral Mills, Inc., will develop ways
tunity to lea^n some of the newest of M &
and George Percy of
developments and
research.
ship
of
Robert
of market
uses
Under
the
B.
Chairman¬
Brown,
Vice-
the
Bauer
&
Black
been
named
Chairman
of
field
will
present
their
findings. Members,; of the panel
include Lyman Hill, Servel, Inc.;
Frank
sored
motion
pictures.
phases
of S. C. Johnson & Son.
of management" will
The pro¬
advertising
Director of Public
talks
eral
vertisers today.
Members, it
recalled,
polled
ad¬
were
was
their
on
for the after noon, on April 7
by
Ben
Duffy,
President,
talks by Jack Smock,
&
Dei
Everett,
Research
Di¬
at
will
Meeting
the
and
also
sessions
be
bearing
on
Belding,
Los
Evans Clark,
will
said:
was
H.
Director
of >
Rubber
on
ahead of
Chairman, Public Ad¬
is
Co.
war we
but
us.
Today that
rapidly
in
the
We got
about
methods
a
definition
as never
the
of
war
because everybody was in accord
about
the
goal—victory in the
shortest possible time. The nearer
can come
to the objective of
we
agreed-upon goals, about the pos¬
sibilities
and
prospects
the
of
American economy, the nearer we
shall come to a reconciliation of
methods.
No
is
one
believe
so
that
pretentious
there
will
to
as
be
any
quick or easy formula for avoid¬
ing depression. But the difficulty
of
the
from
should
task
it.
when
not
turn
us
solution
its
is
transcendently important.
Dur¬
ing the recent war, we did not
only solve prob'ems of produc¬
also solved more general
of economics. We met
problems of war financing, of dis¬
tribution, of labor supply, and of
scarcities of civilian goods, with
tion;
we
problems
IN NEW
great deal more know-how than
during the first world war.
In
consequence,
at least up to the
present time, we are in a much
better economic condition in all
EQUIPMENT
a
respects than
second
world
year
Co-ordination
during the
following the first
for
the
conduct
of
from
those
But, with equal realization
of the critical need for
ful outcome, and
a
a
success¬
service
system
and
through
unequalled
the
in
nation.
with
bus
Continental
Trailways, in conjunction with its connecting
certainly learn to
economy
at high
activity, reap the con¬
stantly
increasing
reward
of
improved production techniques,
we
our
of
and, with great benefit to our¬
selves, make an increasing con¬
tribution to world economic sta¬
bilization
and the world peace
which
with
5,000 miles of routes in Texas,
can
rest
only
upon
Los
followed
has
the
nental
bus
in
past three
at
the
States
21
of
The
Company
handed
the
United
$50,000,000 check as the
two
payments on the
a
of
buses,
percentage
miles,
operates
with
an
a
total
of
operating
new
Dallas
between
and
Brownsville,
between
Conti¬
Dallas and
inter-city
and
equipment
San
Denver, and between
Shreveport, La.,
Antonio, Texas.
are
1946,
361,406,125
revenue
in
air-
new
the
are
Southern
lend-lease
from Great
Act¬
surplus
ern
advertisement
industrial
industries,
is
in
the
ready
to
dc
its
a
vital link
the
operations
in Trailways' nation-wide service
In the Southwest today,
highway
travel-minded public.
by Equitable Securities
Equitable has helped
part
largest members of the
transportation, adjusted to meet the requirements
of
series
of the
Continental Trailways offers the finest in
passenger
developments.
one
and national advertising.
Com¬
excess
is
National Trailways Bus System and its
approximately
of
cent
of
Another
of
placed
$7,000,000.
cluded in the settlement were cer¬
items
per
During
equipment.
$100,000,000 settlement of her lendlease account in the biggest such
cash-transaction to date. Also in¬
property transferred
of
fleet
a
of which sixty
operated
pany
on
in
In addition, through service is pro¬
Angeles.
program
Continental
eco¬
South Africa
S.—that between Dallas and
operation.
conditioned
Union
has
that
years
top of America's Class I
companies
U. S. Gets Check
March
renovation
equipment
an
vided
for
250
The
operates the longest no-change
West,
bus service in the U.
homa, Colorado, New Mexico and Louisiana,
nomic and social contentment.
From South Africa
the
in
car¬
Okla¬
can
stabilize
levels
rier
CONTINENTAL TRAILWAYS BUS SYSTEM,
equal determina¬
tion to make the outcome success¬
tain
own
provided
war.
war.
first
its
has
we were
The techniques for peacetime
prosperity are entirely different
ful,
within
carriers
connecting
in
supplying
Corporation featuring
to finance many South¬
others
with
capital funds.
Britain's lend-lease account.
ing Secretary of State Dean Achereceived the payment on be¬
of the United States in his
son
half
office
from
Andrews
had
H.
T.
after they
Minister
immediately
exchanged notes consummat¬
the agreement. The second
$50,000,000 will be paid in six
months, according to Chester T.
Lane, Lend-Lease Administrator,
who
negotiated the settlement.
During the
war
approximately
$169,000,000 in lend-lease supplies
were
shipped directly to South
ing
Africa.
NEW
N AS HVlLLE
HARTFORD
KNOXVI LLE
GREENSBORO
BIRMINGHAM
NEW ORLEANS
YORK
MEMPHIS
DALLAS
Securities Corporation
CHATTANOOGA
BROWNLEE O. CURREY. PRESIDENT
322 UNION
STREET, NASHVILLE 3, TEN N.
TWO WALL
a
be¬
fore, must sharpen its techniques."
visory Committee of the Advertis¬
7ot of agreement
during
com¬
becoming
.
rather
used to
competition which
The first step toward unity lies
not in the selection of methods
goals.
Chair¬
Board, in com¬
Advertising,
reality,
and
the meeting program
"During the
petition
Calif.;
the
Thomas
talk about the
Foote, Cone
Angeles,
at
Chicago.
S.
menting
be
An attendance
expected
of the ANA
man
Chase,
Relations, Gen¬
Corp.—there
and
rector of the Ford Motor Co. There
Spring
Foods
the
Under
Howard
of
Batten, Barton, Durstine & Osborn
selections of topics for discussion
the
for April 9.
program
the U.
comprise the
to
and
Advertising
Young,
tool
a
is
restricted
Association
guests.
in
the
is
the
300
over
Drake
Several
"as
of
used
customary,
Meeting
members
business-spon¬
Mansfield, Sylvania Elec¬
tric Products, and Richard Crisp
of
Spring
can be
'
been
advertiser
and distribution of
search
selection, at which there will be
promotion
national
by
advertising
has
ing, of the U. S. agricultural mar¬
ket and a discussion of production
re¬
Chairmanship
sales
As
panel of experts in the market
gram
and
these
of
means
to sell goods.
sessions. Among other things there
will be a discussion at the meet¬
will deal with media changes and
vertising
and
of
respectively
President of the Bristol-Myers Co.
and
Vice-Chairman of ANA, a
most
problems faced
Division
The Kendall Co. have
what ANA members consider the
pressing and important ad¬
29
their responses.
of
hallmark
the
National Advertisers
as a sup¬
entitled to know what the Council
is
g
gen¬
impact of governmental programs.
The
Council
cannot
study the
general economy just by reading
books.
It can do so only by a
working relationship with indus¬
try, agriculture, labor and con¬
sumers. Not only are these
groups
is
Meeting of Ass'n of
(1809)
STREET, NEW YORK 5, N. Y.
30
THE COMMERCIAL & FINANCIAL CHRONICLE
(1810)
Cleveland Security
Carl
Zies,
V. D. Anderson &
President, Cleveland Trust Co.
Co.; George Gund,
Thursday, April 3, 1947
Traders Association
R. Victor Mosley, Stroud & Co., Philadelphia; Neil
H. Jacoby, University of Chicago; Jay L. Quigley,
Quigley & Co., Inc.; Paul Yarrow, Clement, Curtis &
Snapped at Cleveland Traders Dinner
Co., Chicago.
Walter B. Carleton, Fahey, Clark & Co.; David J. Barhyte, Hawley, Sheyard &
Co.; C. Fisher, National Quotation Bureau; Michael J. Heaney, Joseph McManus
& Co., New York.
'
Everett A. King, Maynard H. Murch & Co.; Dana F. Baxter, Hayden, Miller &
Co.; J. A. McCann, Merrill,Turben & Co.; William C. Doody, Merrill, Turben & Co.;
Edward E. Parsons, Wm. J Mericka & Co.
S. M. Eilers, Hornblower & Weeks; R. M. Gidney, Federal Reserve Bank; E.Lindseth, President of Cleveland Electric Illuminating Co.; Paul J. Eakin, Hornblower
(Seated): George E Jaffe, W. P. Quinn & Co.; John P. Witt, John P. Witt & Co.;
Corwin L. Liston, Prescott & Co.; M. Pennell; N. V. Cole, Ledogar-Horner Co.;
(standing): M. B. Lewis, W. P. Quinn & Co.; P. Klocker, W. P. Quinn & Co. .
& Weeks.
Snapped at Cleveland Traders Dinner
%
„
Snapped at Cleveland Traders Dinner
Volume 165
Number 4582
THE COMMERCIAL & FINANCIAL CHRONICLE
Eleventh Annual
Paul Yarrow, Clement, Curtis & Co., Chicago; Paul
Moreland, Moreland & Co., Detroit; Michael Heaney,
Joseph McManus & Co.
Don
W.
L. Liston,
(1811)
31
Dinner, March 28th, 1947
Plasterer, Hornblower
Prescott & Co.
Snapped at Cleveland Traders Dinner
&
Weeks; Corwin
Jay L. Quigley, Quigley & Co.; Morton A. Cayne,
Robbins & Co.; Richard Gottron, Gottron,
Cayne,
Russell & Co
;
James F. Merkel, Chief of Ohio Division of Securities; Charles J. Odenweller,
Jr., Regional Administrator of SEC; Joseph J. Van Heyde; Secretary of National
Association of Securities Dealers, Inc.
'
' i,
,
A. B. Walker, Thomas Steel; Franklin O. Loveland, Field, Richards &
Co., Cin¬
cinnati; H. H. Covington, Harriman Ripley & Co.; E. H. Keller, McDonald & Co.;
R„ J.
Olderman, Field, Richards & Co.
Michael J.
Heaney, Joseph McManus & Co., New York; Benjamin Van Keegan,
Co., New York; Chester E. de Willers, C. E. dc Willers & Co.,
Geoffrey Horsfield, Wm. J. Mericka & Co., New York.
Frank C. Masterson &
New York; T.
Roderick A.
Gillis, Wood. Gillis & Co.; Alvin J. Stiger, Saunders. Stiver & Co.;
Glidden & Co.: George W. Brown, Saunders, Stiver & Co.; J. Dugge, Saun¬
ders, Stiver & Co.; J. Weeks, Glidden & Co.; H. D. North, Ferry Cap & Set Screw;
J. Meyers, Cleveland Graphite Bronze; Wallis W. Wood, Wood., Gillis & Co.; W. Lat¬
ter, Cleveland Graphite Bronze.
L. Fulton,
Robert Hail
(standing); Earl Finley, Finley & Co.; Walter Gray, Standard &
Poor's; Thomas Melody, First Boston Corp; Michael C. Hardony, Finley & Co.
32
Dutch and French on
and Russia on the
American,
the
Struggle for Middle East Oil
(Continued from first page)
from
oil
alone
to
becoming
tremendous
it
is
powers.
who
interests
oil
Russians
the
East.
other
and
the
gain most from a victory
stand to
over
a
political conflict be¬
Russia
tween
But
Finding
the
in
Near
most doors to the
oil world closed against her, Rus¬
to penetrate oilrich territories abutting her own
has
sia
begun
doorstep.
(
made
a
The 50-year agreement
year or so
ago
with Iran
be safely said to be the fore¬
runner of a series of other Rus¬
northern province bor¬
der ng on the CaspiarTSea. D'Arcy
subsequently went to London and
organized shortly before World
War I the Anglo-Persian Oil Co.,
at first a private company, later
financed by the Bank of England,
which bought 56% control in the
company
owning
the
rich
oil
fie ds
head of the
the
near
Per¬
Gulf.
sian
a
built
large refinery at Abadan, at the
riv¬
ers, and pipe lines connecting the
refinery with the principal oil
well as the
Royal Dutch Shell oil company.
fields
companies
as
delta of the Tigris-Euphrates
about
northeast.
miles
100
to
the
As the profits to Brit¬
large, Persia tried to
cancel the 60-year agreement in
ain grew so
,
Russia's Growing Power in
Near East
intentions,
her
sugar coating
to
what
having forged firm alliances
with
her East-European
neigh¬
and
.
after World War I in a
dominant position,
and desirous
to protect her overland route and
strategic <ife lines through the
Suez
to
India, England moved
heaven and earth to procure oil
*
Left
concessions in
at
a
dates
Tigris-Euphrates
regions and Iraq. Hence the Irai
Petroleum
Co.
came
into
being
in
1927, truly a mumbo jumbo
concoction
international
of
hue
and complex,
in which French,
American, Dutch Shell and Brit¬
ish capital participated to the ex¬
of
Mosul
larger share of the spoils
Middle East,
the
over
this
a
the
time when she accepted man¬
tent
cure
that
at
happening
beyond her borders.
I
Shah
with the result that the
of Persia,
Mahomet Reza
Pahlevi.
who
changed
Persia's
name
to
Iran, managed to se¬
herself
was
21.25%
each.
oil,
To
was
from Haifa to
refineries
at
Tripoli, with
Abadan
and
Haifa,
of what since then has been ca led
which proved of incalculable
East is steadily growing.
Directly opposing Russia's ma¬
neuvers
for unilateral action in
the
Anglo-Iranian Oil Co.
This
company produced nearly 60 mil¬
lion
barrels
of
crude oil,
em¬
ue
the Near East,
and impelled by a
Ibn Saud
is ex¬
desire to appease King
and
the
America
Arabs,
to play a strong hand in
the game of power politics, in
which such devices as the Middle
ployed 65,000 men and paid out
more
than $20 million annually
to Persian labor.
pected
concession, afford¬
ing special facilities through Pal¬
East Pipe Line
estine
to
Trans-
the'.American
Arabia Pipe Line
Co., is
a
domi¬
In
order
to
understand
better
Russia's motives in her battle for
—-the Near East
it may be well to
find out what really started Rus¬
sia on her expansionistic urges.
After the 16th
century the cor¬
rupt Turkish and Persian empires
became easy prey to Russia and
Great Britain, who were angling
for commercial routes, oil and
When the Brit¬
other resources.
ish East India Co. licked the Port¬
in 1618 for the pearl fish¬
of Ormuz, by establishing
uguese
eries
themselves at Bandas
Abbas
and
Ormuz, the British began to ex¬
ercise
a
Persia
and
have
re¬
tained that hold ever since.
British and American Penetration
William Knox D'Arcy, an en¬
terprising Australian, obtained in
1901
from
the
Shah
of
Persia
a
unex¬
posed oil regions in the north of
however
present
Soviet
regime
Russia
her
on
not
the
that
was
It
Iran.
had
moves
for
expansion. For that we have to
go back to the days of Peter the
Great, who started the Russians
on
their imperialistic escapades,
first
westward
to
the
Ba.tic,
thence
eastward
across
the
Si¬
berian
plains to the Pacific, and
finally southward to the Black
and Caspian Seas, and beyond to
and
the
Per¬
the
Mediterranean
sian
Gulf. Succeeding at the Black
dried
America
the oil
Britain
somewhat
spirit of
cooperation prevailed, with the
result that American private com¬
panies managed to secure valu¬
able
concession
at
Bahrein, on
the
well
a
coast
west
and
in
mer
Secretary
building
the
of
Saudi
Gulf
posed
up
understood
Persian
Arabia.
For¬
Ickes even pro¬
pipe line from
a
these fields to Egypt or
and
suggested a very
agreement
Palestine,
excellent
Britain and
between
Straits and Dardanelles presented
more
ambitious of her plans.
After World
East
War
I
the Middle
situation
radically changed.
With Germany out of the running
—her Drang Nach Osten dream
having gone up in smoke—the
Ottoman
Empire having disap¬
with France taking
back seat except of course, for
peared,
a
and
Russia
Netherland Indies
Persia
1,503
283
200
20
marketing of their re¬
this agreement had
the United States,
it might have helped to stave off
sources.
If
been ratified by
Russia's
demands
and
ease
for
her
oil
conces¬
suspicions,
also opposed
by powerful American companies
who
saw
prices
in it
and
a
move
reduce
The result is that
to decrease
their
profits.
in this pres¬
ent hectic
politics
world, in which power
influences
international
affairs, the Middle East area has
become
a
breeding ground for
suspicion,
upon
which attenion
will
cow
in
tion,
with
the
-i—
Egypt
bar¬
Saud
each
To the United States this Arab¬
only mean a sup¬
ply base for her foreign markets,
it
will
tween
also
fill
America's
the
oil
be¬
gap
supply
and
consumption, while in final anal¬
it
Near
121
may
secure
oil
of
in
adequate
an
of
case
war
or
Suspicions
Eastern
that
of
53
—
mil¬
Rus¬
ian oil will not
Soviet
production
produc¬
States at¬
barrel of Arabian oil produced.
Russian
All other countries'
total
oil
United
While if is highly speculative at
this juncture to appraise what this
Total Middle East
Production
world
taining a production of 1,711
lion, Venezuela 323 million,
149, and Iran 128 million
rels. And, incidentally, Ibn
will get 23 cents royalty on
reserve
11
9
Bahrein, Arabia
be at least 110
annually.
It will
sia
ysis
74
27
(Iran)
Iraq
barrels
fifth
other emergency in that area.
oil
Russia,
Russia
having
operate
to
mean
fact
remains
is mighty suspicious
Britain and America
close
so
will
the
to
now
her
own
doorstep. Russia regards this pen¬
etration as a conspiracy,
something
o'ogist of the Standard Oil Co. of
that will surely become evident
New Jersey, estimated a probable
Wallace
oil
Pratt, economic ge-
E.
reserve
of the Middle East at
180 billion barrels, compared with
110 billion for Soviet
In these international oil rival¬
British
the
nate
the
sought to elimi¬
French,
that we may
lodge a formal
so
expect France to
protest at the Moscow Conference,
Britain
ask
to
United
the
and
States for full
explanation of the
oil agreement made in 1927, to
which France was also a signa¬
tory.
With Russia
a
aspiring to become
great industrial nation and her
and
to
enlarge her mercantile
naval
fleet, it becomes in¬
creasingly clear why Russia is
angling for Near East oil resources
in
this strategic and economical¬
ly-exploitable combustible area.
As
for
her
ultimate
Russia still
of
the
been
partner in
a
British-French
American
-
the
Dardanelles
Straits.
to
Dutch
-
Iraq Petroleum Co., by which all
to receive equal
were
Turkey,
interrogate Britain and Amer¬
ica about the future of
oil in the
of
southern
of
Iran
Mediter¬
penetration
her
and
railway
a
British
and
eastern
lines. Russia's
ranean
trol
the
and
She poses a direct threat
Greece,
into
objectives,
desires direct control
domination
Having
to
conference.
desire
Russia.
ries
in Russia's attitude at the Moscow
barrels for the United
100 billion
opportunity to participate in any
future petroleum ventures in the
Middle East area, France is certain
and
This agreement was
the
S. A.
ment
and Baku,
nate
U.
Central & South America-_
will
production
million
rank
but
Millions
of Barrels
Area
signatories
sions
Russia's desire to domi¬
Constantinople, the Bosporus
angling for, a glimpse at the
following table gives the 1943 oil
production in million barrels of
42
gallons each, in the Middle
Eastern area in relation to the
other vital oil areas of the world.
are
the United States for the develop¬
Sea, at Azov, Astrakhan, Derbent
dominating influence over
Southern
still
provide a c earer picture of
what Russia and the other powers
States, and
During World War II
rivalry
between
Great
in Iran it becomes clearer
why Russia moved heaven
tages
started
nating factor.
Rivalry
and
and earth to grab the
II.
Ending of Anglo-American
and
now
val¬
to the Allies in World War
In view of these British advan¬
and
balance,
To
laid from Kirkuk to the Mediter¬
ranean
bors, Russia's power in the Near
■.
with Greece's fate in
they will battle for
position and first place.
the
market
line
pipe
a
side
one
other,
Syria
over
concern
with
1933,
Making no secret of her desires
nor
home
time
,
The Anglo-Persian Oil Co.
mandates
and
Lebanon, Russia seemed too much
occupied with problems closer at
the
ing
episodes. And spearheading
the
opposition to the Russians
will be the Standard Oil and Brit¬
sian
her
60-year monopoly for the exploi¬
tation of oil in all Persia except¬
may
ish
Thursday, April 3, 1947
THE COMMERCIAL & FINANCIAL CHRONICLE
(1812)
con¬
that
country
from
north
to
south,
places Russia actually across the
British
life
would
cutting
also
line
to
India.
This
divide
British-con¬
trolled Iran from the British-con¬
trolled Mosul oil fields. And now
territory of the former Ottoman
that
Empire.
through Iraq to the Persian Gulf,
With British power and prestige
the
in
East
Near
mined,
greatly under¬
might
Britain
be
quite
willing now to enter into a part¬
nership with America with regard
to the partitioning of Middle East¬
There is however
oil.
ern
ob¬
one
stacle in this so-called AmericanBritish
entendre
that is
and
that
during the Mos¬ Britain's sterling bloc on the for¬
Conference.
With
British, eign exchange of the Middle East
is not going to be so conducive to¬
ward securing American sentiment
favor of such
oil
ican
British-Amer¬
a
partnership.
All
ing
the big powers
East
are
Arabia
now parry¬
become bigger
than the USA or
may
producers
oil
the
Hence
Saudi
million
square
and
Arabia—with
the size of Texas—has
oil, estimated at
The Texas Co.
bil ion barrels.
California
Co.
Oil
Standard
the
and
5.25
people, 610,000
miles of oases and deserts
vast reservoirs of
20
her
nomadic
twice
the
on
all
bought
of
concession
a
determined
her sphere of influence into
other
Arab
King Ibn Saud in 1933, to
exploit his country's rich oil re¬
sources.
Since 1943 that country's
production
has
gone
any
lands, will become
a
threat to world balance of power
and to peace.
There
will
contention
Moscow
the
be
another
brought
bone
forth
conference,
of
the
at
that
and
is
question regarding the exist¬
of
the
Russian
the
Oil
This
Fields
society
Society
up
by
of
Northern
for
Iran.
follow
seems
to
down
by
the
pattern
laid
Eastern
Europe, where Soviet and
garian
and
formed,
Washington
Russia
and
in
Hun¬
have
been
the loud protests of
over
agreements
to
Soviet
companies
and
London,
whose
direct challenge
are a
the interests of American bus¬
iness.
It
is
to
be
from
oil
attempts
part of Russia to extend
Rumanian
Soviet Union.
,
down
the Research and Exploitation of
first place in the Near
fully aware that Iran and
for
pressing
Mediterranean route.
ence
Parrying for First Place
is
she will in time outflank Britain's
be focused
in
Russia
expected
that
the
question will be posed in Moscow
whether
tute
such
companies
consti¬
closed door to private cap¬
a
leaps and bounds and it
now pro¬
ital investment from other nations
duces 73 million barrels
annually.
in these
Its
prospects
good
that
have
plans
become
made
were
so
the
other day for the construction of
the
world's
largest pipeline,
inch in diameter, 1200
and
to
a
Syrian port
ranean.
rels
at
through
on
miles long,
Transjordania
the Mediter¬
It will have 300,000 bar¬
daily capacity, and will save
least
3500
shipments.
When this
Arabian
miles
on
westward
pipe line of the TransLine
Co.
is
com¬
pleted in 1950, Saudi Arabia's oil
r
part
a
decided trend
toward increased
creasing
in such
on
of American companies
participation in
community
of
an
in¬
interests
operations by subsidiaries
and affiliates of American domes¬
tic oil
It
companies.
becomes
from the
Eastern
evident
most
oil
area
is
destined
one
to
of the
explosive world situations,
which will bear close
years
therefore
foregoing that the Near
become the theatre for
X
Pipe
the
30- foreign oil operations and
running from Dharan north¬
westward
countries, especially since
there has been
to
come.
watching in
Volume 165
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4582
Government
(Continued from first page)
whose income do not increase
rapidly
do prices.
as
recipients,
government employees, white col¬
lar
workers, etc., have been in this
general category. One effect is a
growing volume of resistance by
these
groups
to higher prices.
Temporarily this resistance may
be
obscured
overall
as
remains high.
demand
But in time, it will
he reflected in
reduced level of
a
Responsible for High Prices
as
as
Pensioners
and other fixed income
to obtain the
total demand.
we
have for cotton and wheat
and butter that
for
and
and
perishable foods such as
vegetables and meats, it would be
difficult, if not impossible to pre¬
vent price rises in most instances
under conditions where large in¬
sistent demand here and abroad,
exceeds available supplies.
As a
recent U. S. Department of Com¬
merce
study notes,
"The most
rapid as well as by far the largest
increases, occurred in farm prod¬
ucts and foods where pricing was
original cost, prove to
inadequate to replace plant and
equipment.
In some cases, this
creates the need for
shall note
counter
rise
difficulties
firms
when
sharply. Depreciation
en¬
prices
reserves
based upon
be
ing which in turn
feed the
may
prevailing inflation.
time,, industry
borrow¬
new
At the same
For
finds
products,
prices much, to keep them
unchanged, or to cut them regard¬
of
the
fact
temporarily
in
that
demand
is
of supply.
excess
Under shortage conditions such as
those
prevailing
currently
in
many
lines, such
necessarily
sumers
a
who
decision
would be
willing to
the prevailing price and
higher price will not be
pay
a
will
that many con¬
mean
Approximately half of the
total increase in living costs was
due to the rise in meat
market
an
for
new
prices
(30.2%), and the prices of dairy
products (20.1%).
These are not
the areas of industrial adminis¬
How¬
cars.
tered prices. These price increases
not been attributable to a
have
conspiracy or collusive actions by
big business, cartels, or other fa¬
vorite whipping boys: Then main
on
raise
less
prices.
interesting illus¬
particularly in the used
tration,
Industrial Price Policy
the other hand, the producer can
make a deliberate decision, not to
the
you
manufactured
established
ever, many customers are able to
satisfy their desire at a price lower
than that which they would have
to pay in a free market.
Products
pound meat
a
with
Discretion With Manufactured
later.„ At this point, I
merely want to recall to
car
connection
the
price determined by the producer
to obtain the product.
Automo¬
biles furnish
bacon and pork prices.
no
resistance to dollar
above
witnessed
day to day basis and where
single seller had anything to
gain by taking a lower price if it
were
possible
to
sell higher."
These demand-supply forces have
been fully operative for food in
particular, with consequences I
business
developed last fall
adjustment of
bid
even
able
With this excursion into theory
behind
I would like to turn
now to the question of industrial
price policy. Much of the current
discussion overemphasizes consid¬
erably what industry can do to
reverse the recent price spiral. A
few figures will give the neces¬
sary background for the perspec¬
tive which is so sadly lacking in
much of this discussion.
During
1946, approximately 70% of the
33
rise in living costs was due to the
rise in food prices, and
13.5% was
attributable to the rise in
clothing
Inevitably,
of these potential customers
will
prompt
in
product.
some
prices to that resistance. Recently,
a
similar development has been
a
on
Similiarly,
the
(1813)
factors have been the 26% rise in
farm
prices and the removal of
subsidies which resulted in an in¬
us,
crease of about 10% in the food
index and about 4% in the total
index for consumers' prices.
It
should be noted that from August
1939
to
date,
farm
prices
have
risen about 178% while industrial
prices have risen only 59%.
(Continued
34)
on page
growing
a
proportion of its profits or work¬
ing capital tied up in inventories
valued at higher prices.
This too,
lead to an increase in bor¬
rowing. During the period of pricie
Tise, inventory profits may be
may
made
but
celled
In
these
out
light of
1946
rapidly can¬
prices decline.
are
when
this
background, the
policy and
price changes is understandable.
wide interest in price
Realism
Much
of
Needed
be
accomplished
framework of
within
the
tional arrangements.
useful,
therefore,
discussion with
to
this
preface
review of
a
terest
some
elementary economics.
Prices
perform
in The
role
During the
Columbia
Corporation, Columbia Engineering Corporation, the
terest rates.
shall
subsidiary service
only
economy:
be
allocated
buyers.
Rising prices act to increase sup¬
among
have
the
System
company,
Declining prices
and
consists of the Parent
now
and nineteen subsidiary
operating companies constituting
grated system.
plies and to cut off the least in¬
sistent demands.
Gas
year
two
new
issues of Debentures
This
sold
were
at
Stocks
lower in¬
refinancing leaves the Corporation with
class of stock, subject to $97,500,000 of debt in
one
short
completely inte¬
a
an
the Corporation redeemed its Bank loans,
Debenture Bonds and Preferred and Preference
They determine the
volume of supplies and they also
determine
how
these
supplies
our
in
customers
having a population of about 7,000,000, in Kentucky,
Maryland, New York, Ohio, Pennsylvania, Virginia, West
Virginia and the District of Columbia.
area
Company.
in
System supplies directly or indirectly, about 1,500,000
residential, commercial and industrial
Dayton Power and Light Company and The
Cincinnati Gas & Electric
dual
a
The
System is now engaged principally in pro¬
ducing, purchasing, transporting and selling gas. During
1946, Columbia Gas & Electric Corporation complied
with the Securities and Exchange Commission's order for
geographic integration. This included the sale of its in¬
existing institu¬
It should be
our
of Columbia Gas & Electric Corporation
Columbia Gas
discussion
current
unrealistic in terms of what
seems
can
the
From the Annual Report
term
serial Debentures and
long term sinking fund
debentures—a sound and conservative
capital structure.
tendency.
Through this price mechanism a
point is reached where supply and
demand
reverse
in balance at the pre¬
are
vailing
price.
When
demand
COLUMBIA GAS & ELECTRIC CORPORATION AND SUBSIDIARY COMPANIES
is
strong in relationship to sup¬
ply, the result usually is higher
.prices.
When supply is large in
very
relationship to demand, this usu¬
ally leads to lower prices.
The
important point to be remembered
is that both functions
impor¬
are
PRO FORMA CONSOLIDATED INCOME
'r
i
■■
supplies
If
allocate
among
the
cial influence must
order
be
exerted
*'/*
these
alternatives
will
Those
will
Those
the
pay
t
87,880,149
81,217,593
1938
1937
'$
86,917,688
83,329,353
»
»
52,025,856
13,672,606
61,101,352
49,807,975
68,834,327
53,078,969
11,293,377
15,755,358
A#-.
•
1,920,152
i
14,313,578
14,105,267
13,281,443
,
.
-
2,796,875
2,796,875
2,796,875
2,796,875
H
? B
h
.
.....
»
M
? ?
?
*
"
?#
1,353,888
1,566,753
1,403,123
1,490,842
.-
12,480,580
13,047,659
12,105,853
9,890,254
14,264,516
2,796,875
2,796,875
2,796,875
286,641
1,772,249 J,417,328
1,949,813
.
{
»
75,025,186 73,223,570 65,698,462
67,065,962 71,854,730 66,163,901 61,127,278 58,822,023
16,263,391 16,025,419 15,053,692 13,897,908 14,401,547
70,419,714
^>*62,504 16,497,974
P
108.757
112,728
108,306
127,704
139,038
194,204
192,420
2,796,875
203,941
2,796,875
260,045
2.905.632
2,909,603
2,905,181
2,924,579
2,935,913
2,991,079.
2,989,295
3,000,816
3,056,920
3,083,516
14,678,746
11,955,174
11,408,397
11,180,688
10,345,530
9,489,501
10,058,364
9,105,037
6,833,334
11,181,000
2,796,875
Consolidated Net Income per Share of
Common Stock Outstanding
Before Provision for Retirement of
»_»
Debentures*
v
1.20
.98
.93
.91
.85
.78
.82
.74
.56
.91
*-♦
1.04
.81
.77
.75
.68
.61
.66
.58
.40
.75
After Provision for Retirement of
Debentures*
m
...
t'*
.
in
are on a "pro forma" basis—that is, they have been restated
though the System during the periods covered had been the same as it is now.
"pro forma" statements and figures exclude, for the entire periods covered,
the operations of companies which have been divested and give effect to the re¬
financing which has been completed. Only on this "pro forma" basis can informa¬
tion concerning past periods be given which is in any sense applicable to the present
System; however it must be remembered that the present System did not exist as
such in these past periods and the pro forma figures are of necessity restated figures,
The above statements
as
These
be
whose
needs
the
willing
product
to
as
buy
•Sometimes
it
at
is
a present
situation into the past.
securing the Corporation's new Debentures requires the Corpora¬
for the retirement of Debentures, ranging
1947 through 1949 up to $3,700,000 in 1970.
Although payments to retire debt are not, strictly speaking, charges against income,
they must be taken into account in any realistic view of the balance of earnings
which the Corporation will have available for Common Stock dividends. Accord¬
ingly, in the pro forma income statements for past periods, the net income per share
of Common Stock has been shown both before and after deducting from net income
an amount of $2,000,000 for debt retirement.
make regular annual payments
to
from $2,000,000 in the years
they would be
lower prices.
that
•mm
wyi
'
fg
'
•
-V
s?#lfp®aiiis
i
WtiMif#ii
as
,,,,
Z
,
under
'
Tto tiomatk>*Mbf&%m h not
i"
offer orrelkHatipn
COLUMBIA'S GAS RESERVES
U
system only the rich will
obtain
the
goods.
While
available
that
supply
be
may
few special luxury
of
There is
true
■ APPALACHIAN RESERVES
products,
mSOUTHWESTERN GAS CONTRACTS
certainly is not true when it
comes
project
in¬
much
as
m
a
to
•The Indenture
tion
price.
less
are
said
adjusted
intensiye-
higher
tense, will fail to obtain
it
t
1,578,126
1,633,197
rTL584,378 14,864,777
,
Charges
.
who
persons
desire the product most
a
Corporation
i
It is well to remember
able supplies.
for
to
.....
.
merely an objective,
impartial device to divide avail¬
such
.
Consolidated Net Income*.
that price is
of
»
to
adopted.
ly,
Applicable
Total Fixed Charges
obtain supplies.
As we
1946, when price is not
permitted to do its job, all three
of
$
^
'.
Fixed Charges:
Interest on Debentures
in
saw
1939
t
75,907,977
.
Balance Before Fixed
ply and the price system does not
allocate supplies, then one of the
following
alternatives
must
be
adopted.
It must be a case of
come, first served, or some
system of rationing, allocation or
priorities must be adopted, or spe¬
1940
»
95,070,481
Other Deductions
first
1941
I
-.
Net Expenses
buyers.
sup¬
1942
lumkiQ
Columbia Ciac & Electric fWnnrarinrv
Gas X/ Fl#»rfrir Corporation:
limited
demand is greater than
1943
Operating. Expenses and Income Deductions
Cross Revenues
Balance
Thus, if profits are high, a
increase may not be re¬
quired to obtain greater supplies.
But the increase may be required
to
1944
Subsidiary Companies
I
tant.
order
'1945
j
price
in
STATEMENTS
1946
'
to
the
necessaries
of
basic
fact
semi-luxuries.
The
is
that
products
for
vital that
most
mass
it
is
markets be reach¬
if available supplies are
sold.
ed
to be
As you know, in many segments
of the economy this supply-de-
mand-price system operates more
efficiently in thei^ry than it does
in practice.
However; in the or¬
ganized commodity markets such
ample
4,000,009
gas
in South¬
fields which, with The
System's Appalachian supply,
is sufficient
life
of
west
bia's
to
service Colum¬
customers
years to come.
needed
are new
for
many
All that is
the
of
virtually halted by
shortage of steel and
Light and Heat Company
United Fuel Gas
■i
Amere Gas Utilities
Company
The Ohio Fuel Gas Company
Company
^
'
'
.
r"-1:':
Home Gas Company
,
,
'
was
other materials.. Columbia's
gas reserves are
mated
The Manufacturers
transmission
facilities, construction
which
COLUMBIA GAS SYSTEM
at
currently esti¬
4,63 3,000,000 Mcf,
Binghamton Gas Works
Central
Kentucky Natural Gas Co.
Gettysburg Gas Corporation
Natural Gas Co. of West Virginia
Cumberland and Allegheny Gas Co.
The Keystone Gas Company, Inc. j, i V
Virginia Gas Distribution Corporation
FINANCIAL CHRONICLE
THE COMMERCIAL &
34 k
businessmen
Many
Responsible for High Prices
Govt.
continued from page 33)
ditions, I doubt whether it can
Only one-sixth of the increase
in living costs in 1946 was attrib¬
utable to non-food and non-cloth¬
However, this propor¬
tion understates the full signifi¬
cance
of the rises in industrial
ing prices.
because recent increases
have not yet been fully reflected
in retail prices.
But even after
allowing for this factor, it seems
clear that the extent of any reduc¬
tion in living costs will depend
prices
primarily upon what happens to
and clothing prices rather
than upon industrial price policy.
food
The
will be
latter
contributing
a
present con-
under
But
factor.
be decisive.
Although it is popular to blame
for the recent price
increases, they are not responsible
for many of
the factors which
have caused this rise.
businessmen
December, 1945-December,
Dec.'45-Dec.'46
able to higher wages.
Cereal
&
Eggs
Fruits <fe
'
Vegetables
Beverages
&
23.4
23.2
68.0
16.5
2.2
2.3
30.4
16.6
4.7
.1
—.3
3.3
.5
.8
1.7
.3
Fuel
—
1.2
.4
.5
14.4
3.2
3.3
.2
.6
.4
.8
2.5
2.6
has
high levels and have created seri¬
ous new distortions in our econ¬
Although businessmen are not
responsible for the foregoing ac¬
tions, they cannot escape respon¬
sibility for what happens in their
own
baliwick.
Large
demands
have
made
possible substantial
ernment
will
forth¬
be
•
liberally.
In this sector of
businessmen can do
something. They can stop raising
prices to obtain windfall profits,
very
the economy,
where
present
windfall profits, they
levels
can
farmers
probably will total only
about $100 million, a decline of
60% from last year when production payments were being
made on sales of dairy products,
beef cattle, sheep and lambs.
"First-quarter
cash receipts
coming shortly, will reveal that
many products have been priced
and
to
1947
The first quarter earnings
which
payments
during the first three months of
been
accordingly
have
prices which average
25% above the first quarter of
1946.
On the other hand, gov¬
price increases for many raw ma¬
terials and finished products, And
from the
sale of
livestock
and
lion, 45% more than last year.
Prices will average 35% higher.
yield
i
prices.
Prices of meat animals will be
about 45% above
the first quar¬
ter of 1946, and receipts will be
Government Policy Responsible
contributed to the price spiral, the
fundamental fact is that this spiral
up 55%.
Both cash receipts and
prices for dairy products will be
about
40%
greater than last
flows
year.
Nevertheless, while business has
directly
from
government
The increase in dairy re¬
however, is only about
if allowance is made for
policy, past and present, I refer
particularly to the inflation of
bank credit and money supply,
the large wage increases forced
by the government in 1946, and
our agricultural price policy.
One
would think that the government
ceipts
would welcome
higher.
grains
a
25%
production payments in
Cash receipts from crops
first quarter may total
about $1.8 billion, or 8% above
dairy
1946.
in
the
1946.
Prices
are
about
15%
from
food
are
about 35% greater,
largely as a result of higher
prices.
Receipts from tobacco
are almost 40%
above the first
decline in food
prices.
Instead, what do we find?
When price declines have devel¬
Receipts
labor
by
ticipation of still lower prices.
existing or lower level
producer is assured of a long¬
er period of capacity demand.
(c) Steady demand at lower
prices over a longer period of
or
instituting
by
continue to
term
effect, this means the
different bundle of goods
a
The
obvious
other
hand,
a
benefits
everyone—
demand for
farm products is weakened so that
they also decline.
particularly
if
the
Wage Rises Contagious
As
a
result of the national wage
industries
preted
On
gious" effect as wage increases.
The question is shall we raise the
price of labor or lower the price
of
increases raise
Price decreases may lead
goods?
costs.
Wage
to lower costs.
will
be
not
inter¬
being deflationary.
as
the
balance,
recent
considerable
weeks,
publicity has been given to the
price reductions placed in effect
by Ford Motor Company and In¬
An exami¬
ternational Harvester.
nation
the
the
of
financial
newspapers
pages
of
reveals that price
reductions have also begun to ap¬
for other "hard goods." Re¬
a refrigerator company an¬
nounced a reduction in the prices
pear
cently,
of
"conta¬
large
the disadvantages.
One
same
field.
advantages of
reducing prices seem to outweigh
of
the
requiring
conditions
industries
have
the
into
Price reductions under boom
(f)
few years,
doesn't
competitors will
capital investment.)
patterns developed during the past
wage increases in key
quickly spread to other
companies and other industries
whether or not they can afford to
pay more without raising prices.
On the other hand, as Dr. Moulton
of the Brookings Institution has
pointed
out,
a
price
decrease
long
(This is not too significant in
In
tion.
only
of
two
of
its higher priced
large company cut the
units.
price
portable radios by 20% while
price reductions have
reported
for
off - brand
numerous
been
radios.
Similarly, price reductions
for off-brand
have been reported
electric irons and electric freezers.
The Pullman Company
a
of
reduction
of boxcars.
a
and
the
price
An examination of the
advertisements
1946
announced
in
15%
for
the
resale
1947 automobiles
of
shows
steady reduction in the premi¬
ums
requested
over
dealers' list
prices.
important of the
reductions was the
crease than it is to reverse a wage .announcement that extra changes
been
reduced for several
increase.
The former represents have
Finally,
Not
it must be noted that
reverse a price de¬
recent
it is easier to
more
dustrial
flexible instrument of .in¬
policy. Of
steel
the
least
price
products, particularly plates,
shapes, bars, sheets, and hot rolled
in some
instances it may be possible to
grant a moderate wage increase
course,
strip.
These reductions were at¬
to "technological im¬
tributable
is
characteristic
during
the
past
The price of many cars can
year.
be
lowered-
significantly
is
customer
not
forced
if
buy
and
other;
accessories
which
with
the
to
radios,
simonizing,
heaters,
he
has
to
im¬
saddled.
been
fourth
alternative
is
quality, and thus add tp the
service life of goods which con¬
prove
tinue to be sold at the
same price.
approach is
The net effect of this
new
attracted
be
level
being
now
illustration
found in the automobile industry
where "full line forcing" has been
A
wage
result
costs.
Fewer
(e)
the
can
in
increase
in
suffer.
increase
wage
likeli¬
reduce
which would
increases
price decrease, it seems
the economy will be
served
will
also
probably be higher.
Reduced pressure for
(d)
seems
benefit
small part of the popula¬
A price decrease, on the
a
products will be about $3.7 bil¬
reduce
In
sumer.
sale of
sold.
that
A
year;
of higher
claim
more
lion, 25% more than last year.
Receipts from marketings are
up about 30%. Volume of sales
is a little larger; but most of the
increase in receipts is the result
omy.
prices
compensate for the higher living
costs due to higher food prices.
this time
but much less from
government payments. Total re¬
ceipts during the first quarter
of 1947 will be about $5.7 bil¬
last
grains, which purchases in turn
prices to record
statements
getting
from cash sales than at
have forced those
raised.
are
way
services
will
S. Depart¬
of Agriculture, farm income
increased
considerably as
"Farmers
They are not responsible for the
foreign policy of our government
which has led to large purchases
of
September, 1946.
Statistics.
out that;
structure.
gadgets and in this
reduce the price to the con¬
and services than that
At the
to elimi¬
nate the extra
numerous^-
today's high food prices, farm
prices will continue to stay high
and other groups in the economy
compared with a year ago.
Thus,
in a recent release it was pointed
in the price
recently demonstrated.
third alternative is
and
Increase of Farm Income
ment
A
the
pay
According to the U.
of inflation
and explains the tremendous pres¬
sure which has been exerted for
stores has
place,
that wage increases make it pos¬
sible for workers to continue to
S. Bureau of Labor
is the primary source
reluctant to buy very cheap items
as the experience in the
bargain
basements
of
many
department
allowing for this factor total
profit for total period will
best
.9
11.0
They are not responsible for the
huge volume of credit inflation
created during the war years. This
however, it is important to keep
to
may cause consumers
withhold purchases in an¬
the
to
connection,
in mind that many consumers are
hood of inventory losses. After
price decrease.
There are several
reasons
for this.
To the extent
.5
3.9
1946, based on data for
—Rent for December,
upward movements
a.l
2.2
SOURCE—Based upon data of the U.
be low¬
this
ing earned.
These higher profits
are being used by labor to prove
that industry can raise wages to
clear
1.2
2.2
10.8
Miscellaneous
(b)
available
In
time
crease
.4
5.0
.6
1-7
3.4
Rent
Housefurnishings
Build up good will.
Secure
the
economies of
steady high level production.
Where higher prices can be
sustained only temporarily, a
reduction,
when
it
takes
(a)
ered, it would be helpful, but it
will not be decisive.
The main
relief must come from lower food
This
3.9
—1.1
1.7
13.5
Sugar & Sweets.-
Clothing
higher wages.
that industrial prices can
or
company.
demands
To the extent
for
industry
2. Advantages to an
of choice
scope
consumer.
(d) High profits attract new cap¬
ital and provide the incentive
for expansion in capacity.
enough to eliminate the
plausible. However, where profits
are
large and industry is faced
with the alternative of a wage in¬
7.1
7.1
5.0
Oils
costs, not higher industrial prices.
Lower prices for industrial prod¬
ucts will not reduce living costs
15.8
9.9
30.2
20.1
.0
2.2
11
Poultry
Dairy Products.--
a
100.0
&
Fish
Meats,
Fats
Dec.'45-Jan.'47
9.5
—
1947
Point Contributions^by Groups
to Increase m 7ndex_
Dec.'45-Dec. 46 Dec. 45-Jan. 47
by Groups
Bakery
Products
large.
Moreover, there is great
uncertainty concerning f u t u r e
costs,
particularly
wage
costs.
Higher wages are being demanded
to
compensate for higher food
supply is less
than demand at that price,
reduce
quarter of 1946 and currently be¬
CONSUMERS' PRICE INDEX
Index
created because
been
have
prices while
demand for their products is so
to
reluctant
responsible for the
higher freight rates which must prices. However, higher industrial
be paid because of higher wages
prices along with greater volume
or
for the many other price in¬ have contributed to
the larger
creases which have been attribut¬
profits reported during the last
100.0
^0.4
Food
rise in living costs.
They are not
Percent Contributions
Items
food
has been the main
prices which
factor in the
1946; December, 1945-January,
to Increase in
they
Thus, as I have indicated,
are not responsible for rise in
CHANGES IN
OF
DISTRIBUTION
All
Thursday, April 3, 1947
(1814)
to
the
cut
real
cost
to
the
con¬
sumer.
Underlying
prices, is the
any
amine costs to
see
be
and
cut
attempt to cut
necessity to
reex¬
where they can
resist increases in
to
which make it necessary to
costs
raise prices. During
the war, there
developed a "cost plus reasonable
profit" complex under OPA regu¬
lations and government procure¬
ment practices.
Prices set since
the end of the war appear to have
allowed for various contingencies
including labor difficulties, ma¬
terial
shortages, rising material
prices, etc. In some cases these
contingencies have developed; in
other cases they have not. Indus¬
try should reexamine the allow¬
contingencies
these
for
ances
in
light of 1947 realities rather than
1945-46
These
fears.
in
consumer
savings
in
passed
should be
costs
on
to the
form
of
lower*
the
prices.
industries
In
demand is
where
much
greater than the available
supply, price reductions will not
mean
increase in the total vol¬
an
of sales.
ume
But there are other
industries where demand is either
in line with
ply
supply or where
beginning to exceed
is
mand.
seem
such
In
cases
it
sup¬
de¬
would
desirable to experiment with
price reductions of varying mag¬
the country in
the
can
order to determine
extent to which
be
sections ,of
different
in
nitudes
new
demand
tapped by such price re¬
ductions
in order to dispose
before they become too
and
of supplies
burdensome.
Each
company
will
encounter
different
problems. My observa¬
provements." While not too much
tion has been that uniform poli¬
prices. Where wage inequities ex¬ attention has been given to this
cies cannot be recommended, be¬
ist, this would seem to be a de¬ announcement because the
cause
companies, industries and
sirable policy.
In other cases, the amounts involved were small, the
differ widely in their
main emphasis should be upon fact remains that this is the first products
characteristics. In some industries
price reductions. The importance such price reduction announced
each of the methods of price re¬
of
coordinating industrial -rela¬ by the steel industry. In light of
tions and price policy also must the large demand for steel prod¬ ductions outlined above might be
be considered.
It doesn't help the ucts, this reduction is real news. adopted. But there will be many
industrial relations department in It indicates that the steel indus¬ other cases Where as a practical
and
at
the
same
time
to
reduce
its
try recognizes that prices may
reduced as well as increased.
negotiations, if during wage
negotiations, price increases are
announced in anticipation of the
failure to hold wage increases to
moderate proportions.
consider it to be a very
be
I
favorable
can
and
most
How Prices Are to Be
The question may
be
within its
sign.
Numerous arguments have been
advanced concerning the
desir¬
only one of these methods
adopted. Each company
industry
must be studied
matter
Reduced
own
effective
environment if the
results
are
to
be
attained.
be raised, if
In conclusion, I would like to
prices are to be reduced, what is
ability or lack of desirability of the best form for this reduction emphasize again that government
policy rather than industrial price
quarter of 1946, mostly because cutting prices under today r cir¬ to take? Several alternatives may
them.
Illustrations include eggs,
of heavier marketings." cumstances. The main arguments be noted. First, the prices for ex¬ policy is responsible for the pres¬
turkeys, and dairy products. These
ent high level of prices.
While
(Scource: United States Depart¬ advanced may be summarized as isting models could be reduced.
actions have been taken despite
reductions in industrial prices can
ment of Agriculture, Bureau of follows:....
the fact that farm incomes have
Many firms are reluctant to un¬
contribute to a reversal of this
1. Disadvantages to an industry dertake this action because of the
Agricultural Economics,
"The
been at record levels.
Total agri¬
trend, the trend of farm prices
Farm Income Situation," Feb¬ or company.
adverse psychological effect upon
cultural income in 1946 was esti¬
will be the decisive factor. Most
ruary 1947, Released March 16,
mated at $14.7 billion, or more
(a) The producer would be fore¬ previous buyers and an unwill¬ authorities agree that lower food
1947.)
than 10 times as great as the $1.3
going income and to some ex¬ ingness to disturb confidence in
prices are probable later this
billion in 1939, and substantially
In some quarters, fear is ex¬
prevailing
price
structure
tent speculators would be the the
year.
The extent of any decline
with the consequent withholding
above the prewar peak of $11.8 pressed that a
beneficiaries where
price decline will
supplies
will be influenced by the magni¬
billion in 1919.
are
Certainly it may cause a slackening of production
short.
In some cases, a of purchases by consumers in an¬
tude of our foreign commitments
be questioned, too, whether the and will induce a business depres¬
price reduction for such prod- ticipation of still lower prices.
and by the actions taken by Gov¬
recent
operations in the. grain sion. I fail to see how this would
ducts might hamper produc¬
A second alternative is the pro¬
ernment to support the present
markets have been conducted in a
tion.
duction
of
new
lower
priced
apply if farm prices were to re¬
abnormally
high
farm
prices.
manner to prevent new fears of a
verse part of the increase
models such as we have recently
record¬ (b) During bad times, the com¬
Lower farm prices will go far. to
seen
for radios; ball point pens,
price" spiral ^gnds new distortions ed during the past year;' Certain¬
pany
suffers the loss, why
eliminate the .unbalanced«price
far the priqe l^rdcture.
etc. This is a logical development
Of par¬ ly, a reversal of part of the price
structure which is a major threat
should it not reap the profit
ticular importance is the uncer¬ increase pr e
/since many low priced lines disviously described
to the continuation of high level
in periods of shortage?
tainty as
the'probable magni¬ would promote a healthier econ-
oped in recent months, the gov¬
ernment
has
rushed
in
to
limit
..
tude of these, programs.
j appeared during the
:
omy than we now have.
(c) A distribution problem will be
[
war and
their
return is desirable to increase
the
employment~a.ndproduction«
Volume 165
Number 4582
THE COMMERCIAL & FINANCIAL CHRONICLE
\\
"
to
distinguish between "demand"
in
the
plus
economic
of
sense
ability-to-pay,"
old-fashioned
world
has
("God
made
always
must
so
plain
which
had
postulation of the likely
scope of business ac¬
tivity during 1947 in our view
fairly states that present perspec¬
the
with
a
nature
it
and
the poor, He tive of the Bull Market Economist.
of them," Lincoln), Before
proceeding
further,
it
have
been
should
overlooked.
be
noted
It is, therefore, a major objective
of this study to demonstrate how
agree
necessary is such a distinction be¬
tween economic Demand and so¬
either in nature
prime argument in
that
do
we
not
of
for tak¬
ing issue with that breakdown is
the serious distortion that such
sup¬
be
directed
Bull
aVconcession to
as
Market
viewpoint,
ever
in
as to
maladjustments
order.
in the
(1) That the unprecedentedly
high liquid assets position of in¬
will
dividuals
in
the
Spring
of
1946
100%
available
for
purchases
the
total
number
of
with
(5) That it is possible to have
drop
in
prices
without
of
affecting
(6) That the fact of the United
States becoming heir to the Brit¬
ish Empire's world
policing
ing—may be
deprecated.
safely
of
"spending
counterpart
Bear
omists'
The
unit"
Economic
Man,
labored
Bull
by
used
Economists alike
numerable
is
the
born of Econ¬
averaging of in¬
indices, and
figures,
chart correlation data.
To
liv¬
ignored
the
flesh.
Statistical
job
with its concomitant implications
of vastly increased taxes^—thus a
standard
of
on
Man's
and
American
designate this family
the "Economic Man," the
we
takes
the
remainder.
lower
as
concept
non-durables)
adversely
If
head
material counter¬
known
no
part.
insulated deflationary changes in
parts of the economy (e.g., 10%
Before making a detailed
inquiry
the nature of mass market
Man
is
adopted.
is
of
Rather
tice
determine
the
purchasing
than
must
book
absorb, according to the Bull
Market
Economists.
tative
and
mate
of
Man
The authori¬
comprehensive
the
production
dent
to
may
be
ing
Eightieth
for
used
up.
overall
an
increase
contemplate
in
the
of
anticipated 5% expansion in total
to be derived from
of labor.
The
table below presents the pertinent
figures, and includes
our
20 %
$100 Mo.
No.
$600
$20 Mo. $20 Mo.
2—Ratio to total income,
a—Has
ta—Lives
10-year-old
in
21%
5 rooms @
car¬
Westchester.
Taxes
of
the
In
the
expenses
$60 Mo.
$1,320
$500
22%
6%
6%
@ $1,300 (fin.)
b—Buys 5-room house @ $10,000 (fin.)
c—Buys wash, mach., misc. ap. (fin.)
8%
$240
$720
5%
$40 Mo. $25 Mo.
$110 Mo.
$960
new
8%
$240
$200
33%
$480
$300
$3,500
9%
5%
$170 Mo.
$2,040
3%
$560
13%
9%
$6,160
36%
,
House
Car__
72
Misc.
11
Annual
No.
2—Ratio to
$300
«
total income
$1,200
$300
16%
/>
6%
5%
a—Buys new car @ $1,300 (financed)
b—Buys 6-room house @ $13,000 (fin.)
c—Buys wash mach., misc. ap. (fin.)
$240
$180
6%
a-$720 ■/>• $510
2%
25%'
private
capital
that
standard
of
House
to favor the Bullish
that each of the two
able
to
make
Car__
72
Mo. $35
Misc.
17
Annual
$400
$1,320
$500
$480
$180
'*$2,040
$850
Both get
Both make down-payments on house: No.
Both probably buy furniture, save some
3;
''Maid
•
$300 allowed
on
$2,250
old
—
——
Commutation and
car.
view
all
:i:
-
$20
>V 40
:'
Furniture and fixtures
Miscell.
Per
_
(laundry,
$170
—
Tilo roofing company, Inc. is one of the larger organizations
engaged in the application of roofing and siding materials for the
renovation, repair and maintenance of existing structures. Its busi¬
includes the manufacture of
used for these purposes.
asphaltie and asbestos products
As of December 31, 1946, the company's
consolidated balance sheet,
as audited and presented in the com¬
pany's annual report to stockholders, shows total assets of $7,070,-
ties of $3,374,407.04 and earned
surplus of $2,231,992.62.
Condensed Consolidated Statement of Income
Calendar Year
1?46
'
■
Sales, including
*,
gross
subsidiary finance
•
-
lis
J
'
t
»;
income from finUnce fees of
rit
v.-'
company.
.$9,381,340.85
Cost of sales,
including branch Office, selling, general
charges on accounts insured and provi¬
expenses,
sion for doubtful accounts
7,674,304.45
1/707,036.40
Other income
(net)
1,877.09
T,708,913.49
Provision for federal taxes
on
income
675,000.00
Net income
$1,033,913.49
was provided during the year 11)10
charged io
charged to other proh't and loss accounts.
Depreciation and amortization
$30,133.83
was
is
Record of Dollar Volume of Net Sales and Earnings
con¬
Net Profit
1942
of
$4,112,110
1943'
1944
purchases
Net Sales
Net Earned
after
Year
Per Common
Share"
Federal Taxes
377,905.60
$ .74
5,010,738
412,135.10
.82
5,129,493
477,326.11
.96
5,728,370
489,953.45
1.00
1946
(3)-
____
9,381,341
1,033,913.49
2.24
$
10.0
durable
11.0
6.5
A copy
5.5
capital formation.
32 0
;
of the Annual Report, which includes the financial statements
of the Company, may be obtained upon request.
,
139.0
Cpipumey, expenditures (4)—
Services
38.0
Non-durable
Durable
goods
goods (6)
(5)
Tilo Roofing Company, Inc.
75.0
j
26.0
139.0
.
*-4odufKyr baSGd °n f°Urth quarter 1946 plus
(2)M&stlMhte-
$3)
oh'
J Proieetitin^f
baS&'of
current legislative indications.
'/foiirth quarter.
^Wces
(6)
to
rbltej!fltfWJCted decline.
(5)f
Increased
to
present estimate of increase
offset
decline
in
(5).
consumed.
!
.
Breakdown
based
on
/
..
STRATFORD,
.
•:.•<*.
CONNECTICUT
.
*
;
Jno/9'iq oi
,
third
u; !•1
40
10
utilities)—40
month
♦
ness
-
20
Summary of Annual Report
family heads
i
!
lunches
Entertainment
1, $2,000; No. 2, $3,000.
money, etc. (not ded. here).
Insurance
our
43.0
of goods and services.
i
30%
:•
$93
Heat per
NOTES:
215.0
change
i
$8,020
Maint. &
con¬
Dollar Billions
Net. exports
Total private
53%
1
tinued by making the
assumption
equipment
in business inventory.
Net
$5,380
28 %
Per mo.
which
living,
(2).
formation
$1,930
:
11%
in the amount of $02,009.18 of which $31,935.65 was
is
■
per mo.
1945
Producers'
;> ■
$78
Heat per
Mo. $25
•
172.0
Construction
■
Maint. &
car
costs and
Gross
Less
Change
different
a
living.
GROSS NATIONAL PRODUCT AND
EXPENDITURES—1947
national product (1)
Less Government expenditures
Total
"leaning-over-backwards" attitude
postula-
'
7o
Chgs., etc.
G%
1
$80 Mo.
1—Ratio to total income
a—i-Buys
$300
16%
Annual
No.
$1,200
they must incur in order to main¬
increase in
an
productivity
Misc.
1%
tain
production is apparently expected
the
has
of
struction
significant change
employment, the
any
level
Each
standard
over
rate.
from the sky down, we
to work from the ground
In the table below, two repre¬
shown.
the 1946 fourth quarter
Since
the
report did not
year
approach involv¬
the assumption
of
5%
entire
a new
con¬
metropolitan area, headed up by
two
typical economic men, are
1947
the
Statistical
of
about
for
the
sentative families in the New York
■
projects
for
coming
con¬
clusion reached by the President's
Council
of
Economic
Advisers
Car
7%
<6>
rooms
Annual
propose
purpose.
According to that report, the
number
of standards
living recognizable to all, is
used.
In o:her words, instead of
Congress,
this
9%
of
in
the
national
gross
(who does not exist) to
tend with,
esti¬
of
goods
1947, contained in
the report submitted by the Presi¬
and services
of postulating
carrying through the
"Disposable Income" a telephone
that "demand"
'
-
Finance
Clothes Dental
34%
$50 Mo.
employ
income and
necessary to
amount of goods
servicer which
5
the professional economist's prac¬
"demand," it will be
arid
car
Brooklyn
the durable goods of the Bull Mar¬
ket Economists, a novel procedure
or
column
36)
190.63; total current assets of $4,894,416.96; total current liabili¬
determine how capable
Economic
into
the
in
1.
spending units (i.e., families plus
individuals) is 46,000,000: i.e., the
indicated base for the 1946 Liquid sense
are also included those indi¬
Assets Survey of the Bureau of viduals with
sufficient
separate
Agricultural Economics of the De¬ resources to
qualify. Most families
partment of Agriculture.
have a "family head" who is a
(4) That all doubts on costs, very real person as contrasted
prices, etc., should be resolved in with the Economist's
"spending
favor of the Bull Market Econ¬
unit," which is a technical term
omist.
10-year-old
17%
*
2.
well.
as
connection, an interesting
insight into the validity of the
"demand" (i.e., desire, plus abilityto-pay) of the mass purchasers is
had when the individual "spend¬
ing unit" is given another name,
the name by which we generally
know it: the "family."
In this
of durable goods.
(3) That
b—Lives
appear
may
during 1947, but
impetus to its upward
In this
(2) That those liquid assets will
the
page
economy
add
surge
still obtains.
be
a—Has
Food
the
dur¬
for
constitute not only the
all-powerful corrective for what¬
the
seem
of
nature
"demand"
able goods which is reputedly so
questionable, but which great
made
the
over
on
MAN
difference
our
is,
accumulated
Rent
1—Ratio to total income
the Bull Market Economist:
that
of that "demand."
For
illustrative purposes in this study,
certain
assumptions : which
are
are
the heart of
in
(Continued
&
No.
a
with
structure
patently
to
us
spe¬
examination of the
an
remaining 15%.
As 'indicated
Medical
Cases—Man, Wife, 2 Children—
division of expenditures effects in
the
historical
relationship
be¬
prosperity accompanying all-out
types of spending:
production of durable goods to i.e., for services, for non-durables,
satisfy the "limitless demand," our and for durable goods. This brings
will
dle of the
subsequently in the table
on
Liquid Assets,
discussion
THE ECONOMIC
Chief
amount.
or
tween the three
cifically to
is much greater however. As
shown
and
ing power group in the United
States; No. 2 is about in the mid¬
expenditures
consumer
among our many reasons
port of the bullish stock market
outlook is the certainty of great
attention
cance
Case No. 1 is lower-middle class,
No. 2 medium-middle
class;
35
No. 1 is
approximately in the top
part of 85% of the entire purchas¬
comprises
goods, and Economic Man
5%. Their relative signifi¬
No. 2,
cost markets.
and
1
of the United States market
goods and services in the lowest-
with the postulated break¬
down
cial Need.
As the
15%
for all
love
many
to
seems
and
"need"
Such
"desire
Economic Man. No.
and the Stock Market
tion of the probable detailed rate
of total expenditures.
(Continued from first page)
(1815)
I'.-O
'lorifu;
36
THE COMMERCIAL & FINANCIAL CHRONICLE
(1816)
dicate
"Demand Performance" and the Stock Market
(Continued from page 35)
"% Change," in order for
buy (i.e.,
headed
each Economic Man to
of) a house,
finance me purcnase
washing machine and refrig¬
erator, No. 1, must experience a
53% increase in annual income,
car,
evident when
on
actual field
the median
checks
made and
are
"typical" individual
(who in the aggregate is the mass
No. 2 a 30% gain. Since, as the market) is found to have much
discussion on Liquid Assets will lower income and savings than is
show, there are not enough re¬ generally believed. The degree of
this distortion was pointed up by
sources to permit these purchases
to
be made out of savings or the Department of Agriculture's
Study
of Liquid
Assets,
their equivalent, the severity of Field
the impact on current income of made last Spring. In the subse¬
discussion,
the
material
purchasing all of the standard quent
durables is readily apparent. Even contained in that study is drawn
if
the
purchase of either the upon extensively in support of
house or the car is foregone, the our view that measuring real "de¬
drain
on
income is still very great.
In another
of
this
the
for
fact
section, the relevancy
to the ready market
various durables is
more
finely delineated.
At this juncture, it may be well
to state in unequivocal terms the
authors' views
the Bull Market
on
Economist's approach to the
divi¬
expenditures and
income. He uses the principle of
"average" or mean estimates in
sion of national
all calculations.
This results in
a
heavy weighting of "average" individual income, savings, and exBUYING
POWER
AND
LIQUID
mand"
volves
or
Under
% of Total
$1,000
an
professional Economists.
In the table
below, we have at¬
tempted to put in a single com¬
pilation what we consider to be
the most revealing of the data on
the nature of the liquid assets and
purchasing
ability
of
the
mass
market.
OP
THE
ECONOMIC
$600
of Total
Mean Aver.
$600
7%
—
1,999
27%
1,550
1,500
14%
880
230
2,999
23%
2,670
2,400
17%
1,350
470
3,000
—
3,999
15%
3,540
3,300
16%
1,850
900
7%
4,590
6,060
4,300
10%
2,600
1,450
5,500
13%
4,580
2,700
4,000
—
4,999
—
7.499
"
5%
7,500 —Over
3%
$570
$20
13,000
10,000
23%
15,830
7,270
$2,620
10(H
$2,020
100%
$1,748
$430
Total
Income Classes
No. of
Total
Spend. Units
9,200,000
monthly
$133 (amortization, interest, taxes,
Outlook
At
that
the
for
structure
very
of
mand" of
the
the
r
Bull Market Econ¬
"limitless
de¬
omist argues for the employment
of considerable caution
in pro¬
1947
between
.3
80
$9.8
categories ble increases in taxes that accom¬
alone, it would represent a 23% pany gains in income.
increase in the ownership of elec¬
The
issue
between
the
Bull
tric washing machines, and 21%
Market Economists and the Bear
increase in electric refrigerators. Market Economists
(i.e., at least
Median
two
Savings
In
the
most
group,
show the marked
vey
be existing
in
or¬
May
$40,400,000,
a
drop
to
December,
a
steady de¬
new
dwelling
$84,100,000 to
in
52%).
rate
of
six-room frame house
cost
about
$13,000 to build in January, 1947,
and
probably more now—com¬
pletely out of reach of many even
in that lush
upper 15%
regards
housing in
group.
1945,
7%
As
of
has
case
chases of
the
four
the views of the
are
rabidly
economists, of which there
number, since it is felt that
a
durables
more
commentary
would
have
begged the question by»denying
the major premise of continued
durables upon
high-level production. Neverthe¬
less, for a fuller appreciation of
the strength of the Bear Market
Economist's position, it is well to
savings of the family heads can
be appreciated
from the above
table.
It would require 70% of
the total savings of the 85% group
remember that if any but the most
optimistic estimates
ih'come
materialize,
national
of
the
impact
upon sound demand will be much
more
than
severe
lined
has
been
out¬
above.
esied
to
follow upon "unprece¬
consumption" of durable
goods will have been proven to
dented
chimera.
a
Instead of durable
goods actually being purchased, a
very large percentage of produc¬
tion is
now
and
will
continue
to
into
go
may
remain high,
is
their
something else
are already
most articles
as
sharper for having been deferred,
all signs point to a
recession, be¬
ginning sometime in 1947, and at
the latest, by early 1948, which
has the potentiality of developing
later into a depression of
great
magnitude. In terms of the Fed¬
eral Reserve Board Index of Pro¬
duction,
this initial
development
can
mean a decline to at least 140.
In terms of the Dow Jones Indus¬
trial
Averages, this would
initial
an
120-130
drop
To
In
to
mean
least
at
the
area.
this
Sum
Up
discussion
concerning
the nature of the demand for dur¬
able goods, we believe the fol¬
lowing
points
have
been
estab¬
lished:
(1) Eighty-five per cent of the
typical family heads and single
individuals have
to
come
insufficient
in¬
finance the purchase of
durables at present price levels.
(2) Eighty-five per cent of the
typical family heads and single
individuals have insufficient
The too-free use of "average"
figures in calculating the nature
of
individual
purchasing power
("demand") in the mass market
is, in our opinion, the fundamental
reason why the
prosperity proph¬
be
the
the
eventual readjustment in prices of
durables will be so much the
their
The impact of large-scale pur¬
difference that which accounts for
37,500,000 fam¬ to make the normal 12 months'
"average" income ily heads, the median income and cash
outlay out of accumulated
and "average" liquid assets owned, savings figures are
$1,850 and $363 liquid assets.
Even if it were
and that which exists with the respectively.
It is apparent that taken for
granted, as it is in the
typical family head, or our Eco¬ purchasers in this group of either above
table, that credit agencies
nomic Man. As noted at the outset, a new car or a new house would
would permit
the financing of
for illustrative purposes we are be confined
only to those in a these
purchases, it is clear that
assuming that there are 46,000,000 savings category quite exceptional
only a fraction of the projected
spending units, of which about to that of the typical family head.
production can be safely absorbed
37,500,000 are family heads.
The
by basic buying power. A more
typical family head and typical Validity «f Using Median Figures
reasonable interpretation of the
As a check on the validity of
individual has, as the table shows,
above table, when it is taken in
$2,020 in income, and $430 in using median (i.e., typical) instead
conjunction with the preceding
liquid assets, as contrasted with of mean (i.e., average) figures, table
showing liquid assets and
the "average" spending unit's in¬ reference
to
the Liquid
Assets buying power of the Economic
come
of $2,620 and liquid assets survey is again made. To the di¬
Man, would be that perhaps 50%
of $1,748.
Since the purpose in rect question on whether they of
1947 production of the four
presenting the foregoing statistics intended to purchase cars, 84% of
durables could be absorbed with¬
on liquid assets is to
permit meas¬ the "spending units" (i.e., family out
being unduly optimistic. Even
urement of the ability of the Eco¬ heads and
individuals) answered this figure rests upon the some¬
nomic Man to purchase durable "No"; on
purchasing a house, 83% what
shaky premise that the wellgoods, certain facts of significance answered "No." Only 8% said they
heeled 15%—that is, those Eco¬
should be noted from the com¬ definitely would
buy a car, and nomic Men in the income classes
pilation on the typical Economic 6% a house.
This actual field
of $4,000 a year and above—who
Man:
check on consumer
plans, it can have the
ability-to-pay, also have
(1) That 15% control 46% of be seen, almost exactly squares
the desire to buy. The shakiness
the liquid assets.
with the conclusions that can be
of this premise stems from the fact
(2) That it is only within this drawn from our study of median,
that it is just in this 15% group
15% group that a sufficient accu¬ i.e.,
typical,
"spending
units," that there can be found most of
mulation of liquid assets exists to
(namely, that only one-half of
the owners of the latest cars, most
permit either outright purchase of, the top 15% can even afford to
modern houses,
the newest re¬
or large down payments
on, one purchase durables).
frigerators and washing machines.
or more of the four standard dur¬
As long ago as the
Spring of It obviously would take some
ables used above (i.e., a house, a
1946, the representative family unusual measure of optimism to
car, a refrigerator, or a washing head
and
individual
realized, predict that 50% of this group—
machine).
therefore, that the postwar car that is, some 3,500,000 families
(3) For this 15% group to fig¬ and house had
been priced out of and
individuals—are willing to
ure significantly in the market for
his pocket's reach.
Only the well- swap their houses, cars, etc., which
durables would necessitate mak¬
heeled individual in the
been
upper have
purchased
at
price
ing the dubious assumption that
15% had (and may still have) levels some
25%-50% below cur¬
at least half are now without
(a) the
wherewithal, although not rent ranges, for similar articles
a car, (b) a house, (c) refrigerator,
necessarily the desire, to buy post¬ whose quality may be
definitely
(d) washing machine. As, in 1946, war
"hard- goods."
Unfortunately, inferior, and is certainly untested
59% of all homes and farms had the
desires of this well-heeled in¬
(especially new houses), at sub¬
electric washing machines
(17,- dividual are
easily filled.
The stantial increases in original cost.
200,000) and 68% electric refrig¬ number of
cars
he can buy (at
Another facet of demand meas¬
erators
(19,700,000), 62% of the $1,100 in
early 1946, equivalent to urement that appears to have been
46,000,000 economic men had au¬ a
price of about $1,500'now) totals almost
entirely ignored is the
tomobiles (25,000,000), 90% had
2,800,000, about 74% of this year's pressing weight of income taxes
homes (i.e., dwelling
units) (41,- expected production of
3,800,000. upon the Economic Man. In com¬
300,000), grounds for supporting The
$5,020 he wants to spend for a piling living cost indices, the pro¬
such a view are
obviously meagre. house will not
buy any house fessional Economist tends to pass
It is revealing to note
that each
being built today. The standard over this heavy drain on current
month
from
cline in the value of
units started. (From
revolving
bearish
now
between
1946, has witnessed
therefore
may
one
been fairly made. No attempt has
been made to inject into this sur¬
short table below
is shown the amount o"f "demand"
$35,090,400,000
4,640,000,000
6,210,000,000
as
Bull Market Economists'
con¬
$112,640,000,000
exists
described
55%), and houses (58%), around the proper interpretation
which projected 1947 output may of the term
"demand."
As we
achieve, will not effect the same have presented the opposing views,
ratio change in ownership, it is it is felt that the
statement of the
10,178,000,000
6,210,000,000
(4) That within the 85%
the latter)
of
be
mated at
are
of
of
priced out of their mass market.
Since it is our belief that the
50%
is attained in these two
6,900,000
is to
—Billions-
.5
3,999.
46,000,000
CONSUMPTION
AND
Cost
$19.6
cents" considera¬
our¬
economy operating at
prosperity levels is the production
and consumption of durable
goods
at an
ever-expanding level. How¬
ever,
while the produc ion
of
125
—
table
production and consumption
4,000,000
3,000
The function of the
is, that one
characteristics
Washing machines
ables.
All classes
that
again,
4,982,000,000
1,400,000
omists:
associative
80
which
find
we
agree-*
ment with the Bull Market Econ¬
.6
with
IPs
whole-hearted
.8
25,440,000,000
22,770,000,000
13,760,000,000
12,650,000,000
14,000,000,000
3,200,000
2,300,000
in
200
10,600,000
4,999
respect do
one
4,200,000
2,999-
Over
In
selves
Refrigerators
tion
War
time.
consumption
the "dollar and
World
its
80
over
all-per¬
causation is
materially
different, no predictions as to its
length can safely be made at this
33%
—
7,499
and
Cash Outlay
2,000
—
As
months.
4.8
(esti¬
postwar
was
American
and
mum
der
to
absorb
the
anticipated
production of just these four dur¬
—
20
$4.1
cars
its
Al¬
prospective postwar contraction in
general business has yet to begin
12-Mos.
increase
after
I's
was
6.0
relative
felt
consequences, the
relatively short
running time
1,500
the
War
1920-1921 experience
in
its
$12.3
$18,400,000
—
If maxi¬
any
be
predecessors.
vasive
$13,000
2,852,000,000
7,500
4,000,000 washers."
patterned
World
950,000
4,000,000
Housing units
18,600,000,000
4,000
2,500,000
—
Unit
$5,520,000,000
5,000
4,200,000
Retail Price
12,400,000
$1,000
and
between
DURABLES—PRODUCTION
Number
1,000— 1,999
Under
3,000,000
refrigerators
that must
Total
Median Income
CONSUMER
production for durables by
The electrical appliance indus¬
try, according to Ralph H. Cordiner, Vice-President of General
Electric, quoted in the "Sun,"
Feb. 25, 1947; "expects to produce
least, we believe
impartial analysis of the
an
of
various industry leaders.
Durables
and
by
will
economy and will
1937
ures
heat, maintenance).
cerned.
All classes
be
1921
hature of that crisis toward which
1946 in the number of
Median
—
5,000
cities,
rooms.
for
throughout the
probably
the economy appears to be heading
is indicated by the estimated fig¬
expenditure
"insulated"
effect
though
to the firm demand
actually exists would be so
sharp as to bring on a crisis of
major proportions in the economy.
Some
concept
of
the
possible
the
cash-out
be
Its
price levels
standard six-room frame house of
While
MAN
-Liquid AssetsMedian
a
not
Automobiles
the faceless statistic of most of the
ASSETS
with
contrasts
ability-to-pay of millions of indi¬
vidual real live family units, not
of the "average" spending unit,
Mean Aver.
20%
This
$16.53; in
typical for 3.7
was
was
will
means.
of
that
market
mass
2,000
,1,000
rooms
have
readjustment
production, wholesale, and retail
in¬ jecting the consumption of durable
appraisal of the actual goods in 1947. At the most, such
an examination would seem to in¬
the
in
-Income
Income Classes
3.6
$26.91
optimistic
so
the' inevitable
excess
such individuals
that
been the estimates of demand that
amounts dwelling units were unoccupied
of the top few in each income
(of which 78% were habitable).
class.
The resultant distortion is Median (i.e., typical) rental for
penditureswith the
Thursday, April 3, 1947
sav¬
ings to purchase, or to aid ma¬
terially in financing the purchase
of, durables.
(3)
Current
record
production
of durables in the face of dimin¬
ishing effective demand portends
continuance
a
rate of
(4) The
the
vacuum
market
mass
of
in
rise
the
inventory accumulation.
present
level
between
demand
and
real
the
of
consumption is
being concealed by the current
rate of capital formation, exten¬
manufacturers', whole¬
salers', and retailers' inventories.
This, in our opinion, is taking
sive
place because the current insistent
units."
demand
of
spending within the
top 15% is creating a general illu¬
sion
of
kets.
firm
and
insatiable
mar¬
For example, 460,000 houses
in the
$10,000-$13,000
range,
need¬
of
use
credit
consumer
and
meeting of the deferred demand
of the top 7y2% of the
"spending
(5) The time when
of this
vacuum
the
will be
explored is not far off
extent
thoroughly
as
evidence
accumulates
daily that supply in.
ever-widening number of fields
rapidly overtaking effective de¬
an
ing only minor additions, are now
Presumably they are
in addition to the 950,000 housing
mand.
units
by
available.
be
to
built
this
Mr.
Morgan L. Fitch, President of the
National
year.
Association
of
Real
Estate Boards (New York "Times,"
March
is
(6)
The overtaking of demand
has the greatest sig¬
supply
nificance for the economy because
of the present
historically high
level of prices.
2, 1947), is of the opinion
(7)
A major realignment of the
that "the need for 4- and 5-room
economy is in the
hemes in the $10,000 price range
largely has been met and that
builders must concentrate on pro¬
of the extent of the distortion be¬
duction
at
of
In vievr
home of good value alignment presages a general price
less."
Meanwhile, collapse resulting in sharply re¬
happens to the above inven¬ duced production. The consequent
$7,500
what
offing.
tween the price level, production,
and
effective
demand, this re¬
a
or
tory of $10,000-$13,000 homes now
the shelf? Beyond that demand
of the top
15%, as we believe our
analysis proves, there is a vacuum.
on
When the
demand
thin
layer of effective
has been
exhausted
and
the illusion becomes apparent, the
need
for
into
cash
converting
will
inventories
become
large-scale
unemployment
will
further weaken effective
demand,
deflationary
setting in motion a
spiral whose eventual limits
can¬
not at this time be foreseen.
Since the point at issue between
the Bull Market Economists and
the
writers
consists
in
a
funda¬
too
great mental difference of opinion as to
for the marginal entrepreneur to the meaning of the word
"de¬
resist. Then will begin an era of
mand," in closing it would be
income.^ Yet for our two typical price-cutting which will not suffer
appropriate to quote from Webster
families, such taxes represented by comparison with the precipi¬ the economic definition of
that
6% and 9% respectively of total tous slashes that occurred in the controversial
and
loosely
U3edr
income before durables financinq, fur, jewelry, and
term:
luxury goods
"Demand—Desire to pitr4
9% and 11% after durables fi¬ markets in the Fall of 1946.
chase a
nancing—reflecting
the
inexora¬
.
This downward spiral in
prices
by
commodity, accompanied
of payment."
f i
means
1
Volume
165
Number 4582
THE COMMERCIAL & FINANCIAL CHRONICLE
■
We believe there is
this country
nothing
more
important to
than to lower the prices of the
goods that people buy.
The American
people have insisted that the
government withdraw from its attempts to con¬
trol
much
Here
or as
are
and industry.
prices
now.
Not all business
Not all
can
can
reduce
reduce by the same
others
many
is
;
we are
believe price
we
willing to
41«2/v>
reduction
the risks that
assume
involved.
:
These benefits to customers will
63.7%
products
vital,
are.-
Average Price Increases since J941
Metals and metal
uninterrupted production at reasonable
on
levels. This is not
out if it is
a
program
that
^
depend* too,
can
?
wage
be carried
hampered by strikes or work stoppages.
~
;
.
'
(U. S. Government Reports)
M
Motor Trucks
.
Our employes have had substantial increases
35%
,
in pay,
q
II
amount.
as
(U. S. Government Reports)
a
ness
fast
gone up as
All Manufactured Products
prices in peacetime. That places the respon¬
sibility where it belongs—in the hands of busi'
from others. Because
II prices had not
34%
Industrial Power Products
and
wage
questions
are
currently being
discussed with many of the unions
with which
□
Our company
as
possible.
now
has felt a duty to act as promptly
In
our case,
II
the business outlook
makes it possible to move
goal of lower prices. The only way out of the
motor
higher and higher prices is to
Since
through.
We have taken this step not
r
because of
because of a drop
*
j
a i
ent competitive conditions nor
v
in demand from customers. We have
cause
of
our
pres-
taken it be¬
belief that ANY PRICE IS TOO
;
v
These reductions,
which will
save
the
users
of
r^our products approximately $20,000,000 a year,
:
rwill become effective before April 1,
i
a
selected list of tractor, farm machine,
truck, and industrial
we
lose money on a few
and will
power
of
our
in dividend rate.
,
had
an
products.
reductions
will not
apply to
Reductions will be made
ucts.
Some will be cut
Our
our
entire line.
individually
more
on
than others.
as
soon
as
prod¬
Exact
possible.
ability to maintain this lower level of
prices will depend in part
the prices
on
what happens to
and flow of materials that
we
buy
in¬
Having considered the
mak¬
ing these price reductions for the benefit of the
third group—our customers.
products,
and barely break even on some others, these
details will be announced
HIGH IF IT CAN BE REDUCED.
Stockholders have recently
interests of these two groups, we are now
toward the
apply to
break
deal.
crease
vicious circle of
.
25%
Farm Machines
we
Business, to
as
well
pany
as an
of thinking, has
cur way
economic
com-
has long followed the policy of operating
in the interests of three
its employes
as
; *
groups—its customers,
is to
see
that equal justice is
between the three groups.
This price reduction program is
onstration of
■ •
j
and its stockholders. The duty ot
the management
done
social
a
responsibility. This
our
policy in action.
-
another dem-
•>.>
38
THE COMMERCIAL & FINANCIAL CHRONICLE
(1818)
SEC Reverses NASD
(Continued from page 5)
;
choose between the services ren¬
dered by that firm and what is
offered him by others."
\ The full
text of the SEC deci¬
sion follows:
"
An
:K
rick,
the
of
District Committee
EXCHANGE
AND
COMMISSION
Board
Governors
of
(four
participating, one mem¬
ber having disqualified himself)
issued an opinion on Jan. 26, 1946,
the
Philadelphia
full
text
which
of
is
fol¬
as
EXCHANGE
OF
Release No.
ACT
1934
"The members
Governors
3935.
In
the
for review of
tion by
HERRICK,
CO., INC.
disciplinary
ac¬
the National Associa¬
Secuities Dealers, Inc.
of
tion
&
(Complaint No. 19 of Dist. No. 1J)
(Securities Exchange Act of 1934
Section ISA)
—
NATIONAL
SECURITIES
ASSOCIATION
REVIEW
OF
DISCIPLINARY
PROCEEDINGS
;
that
for
reason
11
is affirmed."
Herrick, Waddell brought this
proceeding before us for review
of the action of the NASD.
filed
were
and
Briefs
heard
we
oral
argument.
Prior
the
to
institution
the
of
Committee No. 13 (embracing the
States of Connecticut, New Jersey
New
and
of
Where national association dis¬
ciplined a member for violation
the basis of evi¬
dence insufficient to support
its
findings of violation and an er¬
roneous application of its rules
to that evidence, action of asso¬
ciationset aside and record re¬
manded to association for such
reconsideration
and
further
proceedings
not
inconsistent
with Commission's opinion as it
should deem appropriate.
require that the adoption of
rules
Fair Practice
tinent part
"1.
of
honor
commercial
4
*
York)
office
against the New
of
the present record.
There the
had
questioned
the
Committee
decision
District
of
Committee
No.
into
consideration
circumstances
conditions
all
ness
January 22, 1945, the Busi¬
Conduct
Committee
of
Dis¬
trict No. 11 of the NASD (embrac¬
ing the District of Columbia and
the States
of
Maryland, North
Fair Practice and
39 transactions
> ■
in
view
of
all
relevant
cir¬
respect to such
security at the time of the trans¬
action, the expense involved, and
the
fact
that
he
entitled
is
to
There
is
dispute
no
basic facts and
about
the
claim that the
no
penalty ordered is excessive if
sale
of
have
the
and in a manner in¬
with high standards of
commercial honor and
just and
nors
equitable
sion
Hearings
District
were
held
Committee
before
and
on
;-
the
July
27,vl945, it issued
an opinion in
which it concluded that the
prices
charged by Herrick, Waddell "in
each
and
every
transactions
ably related
that
the
...
to
firm's
of
one
were
the
the
39
not reason¬
market"
conduct
in
transactions "constituted
a
and
those
viola¬
a
security to
been
customer
a
violated.2
facts
To
presented and whether
I The
failure
of the Board
to elaborate its
opinions
the
proceedings
$250.
in
the
Gover¬
to
indi¬
------
*2 In
this
opinion,
otherwise,
indicates
unless
we
the
use
context
the
term
"mark-up" to refer to the spread be¬
prevailing market and sales price
to
the public.
However, it should be
noted that| the evidence in
this case with
tween
regard
the
to
spreads of dealers other
Waddell contains informa¬
up" has also been used
of
of
or
wherein, it was unable to reach a
decision in the two cases -makes it
necesi^
sary for us to rely entirely on the
opinion
of the District
Committee in reviewing
this proceeding.
Cf. Lawrence R. Leeby,
S. E. C.
(1947) Securities
Exchange Act Release No. 3898.^
these
costs
be
mark-up
considered.
We
committees and by the
revievTThlist be based
on
consideration of all pertinent
a
of
expense
executing
than
tion
cost
Herrick,
only
whether
such
who
less'?
of
prevailing
case
in
of
involved
substantially the
market price.
to
in
refer to
cost
in
or
the
"risk-
ters,"
forth
set
the
that 71%
mark-ups
trans¬
in ex:cess of 5%
would not be sufficient to estab¬
lish
a
prima facie case of violation
NASD's rule, and we ex¬
pressed the view that if the NASD
the
of
the
results
all
of
of
a
of
not
tion
reported
effected
were
at
5%, and
interpreta¬
over
announced the Board's
to
qf Section 1
follows:
as
*
effected."
were
The 5%
mately $1,200. It is estimated that
75% of the purchases by custo¬
arise from personal confer¬
between the firm's salesmen
mers
ences
customers
and
the
at
latter's
of¬
fices
or
homes, and the balance
from correspondence or telephone
calls.
Institutional
purchases
amount
to
less
than
one-half
-
of
1% of its total volume of business.
A substantial
proportion of the
were
challenged
group
of dealers in which it
the
tuted
letters
3 Section
"In
nary
15A
(h)
asserted
was
effect
(1)
proceeding
a
action
curities
consti¬
if
taken
propriate
hearing,
the
by
a
se¬
after
ap¬
opportunity
and
the
for
association
and
rec¬
such
other evidence
as it
may deem relevant,
(A) find that such member has
engaged in such acts or practices, or
shall
has
omitted
such act, as the associa¬
found him to have
engaged in
has
omitted,
and
(B)
shall
determine
that such acts
or
practices, or omission
act, are in violation of such rules of
the association as have been
designated
to
in
the
Evidence
NASD
In
the
Adduced in the
Proceedings
hearings before District
cuting
in
customer
so-called
a
received
office
mark-up
to
verify
charged the
does
exceed
not
principal in
chasing securities from
securities
to
selling
or
customers;
pur¬
evidence
of current market prices of secur¬
ities involved; and a statement of
the amount of mark-up or
spread
the firm in each of the
transactions
questioned.
In
The firm*has
reduced
voluntarily
schedule
actions
para¬
ited, or the
quired, by
or
practices
omission
such
any
of
any
rule
prohib¬
act
re¬
constitute
conduct
inconsistent
with
just
and
equitable principles of trade, and shall
declare.
so
mission
that
the
warrant
(A)
If it
if
or
not
or
found
to
At the time of the trans-1
question, its schedules1
maximum spread of?
points.7Sales of secur ities by customers I
are
generally
handled without ft:
charge or at a slight commission ■
on an
agency basis.
Herrick, Waddell provides what-;?
for
a
the lesser of 10% or three
new
as
is
evidence
Commission
does
shall
not
acts
have
been engaged in
by
or
practices
de¬
as
are
the
designated rule
the association, or that such
found
to
have
been
omitted
is not required
set
by such designated rule
rules, the Commission shall by order
aside
the action of the association."
Oct. 25,
custo-L
its
for
Its main office prepares for<
customers an analysis of all*
their
security, holdings,
accounts
cally by the branch
the
salesmen.
all
and
periodi- §
reviewed
are
and?
manager
An
investment
committee composed of senior of¬
ficers of the firm passes on all?
taken by
securities
iomers by salesmen and an active
list is maintained of from 60 to'
90 recommended securities, from-
addition
it introduced
an
opinion,
exhibit,
as Appendix A to this
which summarized the
spreads
reported
reproduced
Waddell,
member
firms
who
reported "princi¬
transactions jfn response to
pal"
an
Herrick.
16; other NASD
in the District of
and
Columbia
feby
NASD
questionnaire.
This
ex¬
percent of
hibit
showed
gross
profit receiyBd by Herrick.
in
the-^39 questioned
that, the
recommended
which about 90%
by
customers
transaction
is
manager with
appropriateness to
its
tributable
only 7.3%
cost
of
dence
they 16
other
firms,
involvfd mark-ups
than
more
also
Herrick,
5%.
The
over
evi¬
sho\fed—that 22%
Wad dell's
=
view to*
a
cus-*i
the
distributed to the salesmen.
that
by
Every
by. the
'
on
all securities recommended by the
firm is kept current in bulletins!]
or
29, oriv.58%, involved
mark-ups in exffess" Tof 5%.
In
comparison, of |525 transactions
cus-;
Information
account.
transactions ranged from 4.2% to
11.4% of cost price, and that of
the 50
transactions reported
by
firm
made.
reviewed
branch
tomer's
to
of its purchases '
are
estimated that
29%
sive
of
over
total
$95,000
and salesmen's
exclu-
expenses,
commissions
of
It is
a year,
commissions, is at¬
to investment
analysis, i
supervision and research.
In 1942 the firm introduced
program for
tomer
the
-
brokers
to
a
disclosing to the.cus¬
amount
the
of
firm's
mark-up in every transaction in
of which the firm, acts as "principal"
transactions
Its
general
practice
fori the i
is
of salesman to inform the customer
between 4% arid 5%, .as against at the time an order is given that
19.8% for the r£st of the District, the firm is acting as "principal"
and that 20%
<|£_Herrick, Wad- and to explain the nature and
dell's transactioAs^wepe at mark-* consequences of its status as such \
at
were
ups over
mark-ups
cost
over
off 4%
cost
or under, as
against 72.9% for"the;-Qther
mem¬
ber firms.
and
against
evidence
of
it| and introduced
what
it
asserted
the;p|opriety *of> the
in
dence may be
lows:
in
question.
Its evi¬
summarized as fol¬
X
f\
Herrick, Waddell was organized
1937. Its principal office is in
New York City, an<f it has branch
offices in nine citie&in the United
States.
The firm is a member of
the NASD and of the
Washington,
D. C.,' Stock Exchange.
It deals
'\i
5 In
Inc.,
the
1943,,*
niritipfi
the
cus-,
The salesman also
Matter
of
S.E. C.
the
Rules
of
F.yrhanpe
Act
(1944),
Release
No.
the
cusses
current
and
what
price
the
the
Se-
3623
question
was
whether
to
acted
of
the..
.
raised by the NASD
Waddell in fact *
Herrick,
principal
in
as
\
dis-|
mark-up
,1!
6 No
as
the
questioned k
transactions under the doctrine expressed
by us in the case of Oxford Company,
Inc., Securities Exchange Act Release No.
3769
(1946).
Although the question is
in
not
issue
here,
we
dence introduced by
p.
infra)
6
tends
firm's
Rented
to
the
note
that
the
the
con-
firm's
acting as principal.
do not undertake to decide
However, we
this question in-this review proceeding.
r.V
'
7 The
J?/,.?-','
record
' •
''
:
;
evi¬
Herrick, Waddell (at
to indicate that
understood
and
customers
v\'
,'//
shows
that
;t.
'?
,
,\';i J
since "(he
in question, Herrick, Wad¬
again reduced its schedule of
spreads with a maximum now of 9% oni
transactions
under
$1,000
or
8%
on
transactions
over
$1,000, but not more
than 3 points.
.
transactions
dell
of NASD to its members dated
that
to
be "relevant circumstances" bear¬
ing ppon
mark-ups
advise
to
also
tomer will be charged a mark-up
the cost of the security to
over
National Association of Securities Dealers,
4 Letter
"individualized"*'
an
39
Com¬
such
prohibited
rules of
act
the
the
finding required in clause
the
termine that
are
to
appears
its
price
in
security
acts
maximum
of
spreads.
sented
the
the
twice
mers.
as
that
permitted
under the schedule.
respecting
in
se¬
customer
that
service
.
the
the
and the firm's New
manager
York
as
actions
from
bills
transactions
the
investment
ported to act
orders
transac¬
is maintained by the firm and
are reviewed by*
ups
all
it describes
50 consecutive trans¬
which the firm pur¬
most
curity to the customer at a stated:
mark-up.6 A schedule of mark¬
the Commission that such action
should
be modified in accordance with
graph
(2)
of this
subsection.
The
Commission
shall
likewise
determine
order
then
and
-
the firm.
whether
purchase
Waddell setting forth information
Herrick,
In
"riskless"
the
customer
Herrick, Waddell objected to
the adequacy of the proof pre¬
determination
deals.
tion in which the firm purchases %
the
security only after it has
of the
association,
Commission shall by order dismiss
the proceeding, unless it
appears
to
the
it
purchases by customers the firm
purports to act as principal, exe¬
Committee No. 11 on the charges
filed against Herrick, Waddell the
NASD introduced a schedule of
transactions reported by
member
consideration of the
upon
before
discipli¬
registered
a
against
Commission,
notice
The
position in securi¬
a
which
in
called
2.
reported
provides:
review
to
association
thereof,
ord
in
rule of the NASD promul¬
a
aside such determination upon re¬
view.
*
,rr
ties
Waddell
letters
by the institution of a proceeding
before this Commission by a
or
proceeding was
the prevailing
as
mark-ups
introduction of evidence
order based a finding against a member
and the value of any service he
solely on the ground that a pre¬
may have rendered by reason of
sumption of wrong-doing arose
his experience in and
knowledge from charging a
mark-up of over
of such security and the market
5%, it would be our duty to set
therefor."
such
Herrick, Waddell
this
same
prices
term "mark¬
simultaneous
transactions, its
actions
market
and/briefs, the
In the
engaged
their
spread between
price, with no indication
dealers'
costs
were
the
sales
equivalent
spreads.
to
as
and
mere
of
tions with respect to such
security
at the time of the
transaction, the
or
In the record
amount of
on
service charge, taking into
consideration all relevant circum¬
stances including market condi¬
tion
tion of Section 4 of Article
III of
the Rules, and a violation of
Sec¬
tion 1 of Article III of the Rules
as it is
interpreted by the Board
of Governors."
On the basis of
conclusions
the
District
Committee censured the firm
and
directed that it pay part of the
the
by
Board
or
that
cate
trade."
percentage
must
the
a
consistent
of
consti¬
stated (at p. 11): "Determinations
a
the
diction under the statute is limited
to
cases
in
which
disciplinary
action is taken.
cumstances
principles
which
with
transactions
New York pro¬
consolidated with
decide
alleging that in
this
issue
we
must
determine
during July, 1944
it made sales as
principal to cus¬ whether the NASD properly in¬
tomers "at prices which were not
terpreted the rules in the light of
fair
letters
average holdings are estimated at
$10,000 and the average
purchase transaction is approxi¬
rarely takes
the
besides
market
showed
the
and
Carolina; Virginia and West Vir¬ violation has occurred. The sole
ginia), issued a complaint against issue is whether the NASD's rules
the Washington, D. C. branch of governing the amount of mark-up
Herrick, Waddell charging it with a member firm may take in •the
violation of the NASD's Rules of
the
simply an interpretation of
the NASD's rules, a proper form
of comment by the Board of Gov¬
relevant
including
action of District
"It shall be deemed conduct in¬
Committee No. 11, the same Board
consistent with just and equitable
Baker, Hostetler and Patterson, issued a similarly worded opinion principles of trade for a member
Stephen C. Thayer of counsel, of in the New York case affirming to enter into any transaction with
Cleveland, Ohio, for National As¬ the action of the District Com¬ a customer in any security at
any
sociation
of
Securities
Dealers, mittee therein. Thus the Board, price not reasonably related to the
without elaborating its opinions current
Inc.
market price of the secur¬
or
indicating wherein its members ity."4
were unable to agree, upheld both
The letters concluded with the
This is a proceeding pursuant to
Committee
decisions,
although statement that the District Busi¬
Sections 15A (g) and (h) of the
they reach opposite results on ness
Conduct
Committees
had
Securities Exchange Act of
1934,
substantially similar facts.1
been instructed to "enforce Sec¬
to
revie^v disciplinary action by
The case which arose in the tion 1 of Article III of the Rules
the National Association of Se¬
New York District is not now be¬ of Fair Practice as above inter¬
curities Dealers, Inc.
("NASD"), fore us for
review since it was preted, having in mind the per¬
a registered association of
securi¬
ties dealers, against one of its decided in favor-of Herrick, Wad¬ centage of profit on which 71%
dell by the NASD and our
juris¬ of the transactions above referred
members, Herrick, Waddell &
Co.,
broker-dealer.
opinion in which
an
that
found
principally with custodiers whose
about
actions, whether iji 'listed' or 'un¬ ernors, and did not amount to the
securities, if a member buys adoption of a fixed rule
govern¬ firm's business is in listed securi¬
for his own account from his cus¬
ing mark-ups.5 Our opinion was ties. It has participated in only
tomer, or sells for his own account careful to
point out that in pass¬ six underwritings in the five years
to his
customer, he shall buy or ing on
the fairness
of
these
prices before
proceedings
and
sell at a price which is
fair, taking charged there are other factors
survey of the pricing policies of
members of the Association which
ceedings were
the appeal. On the day the Board
issued its opinion, quoted above,
registered
the
listed'
11, the Board of Governors,
upon its own motion, undertook
Waddell & Co., Inc.
a
the
and
NASD
of
tuted
trans¬
mark-ups in 18 transactions re¬
ported by the New York office of
Herrick Waddell. Hearings were
held by the Committee, which is¬
In the Fall of 1943 the Board of
sued its decision on January 16, Governors
of the NASD issued a
1945, exonerating the firm. When series of letters
interpreting Sec¬
subsequently an appeal to the tion 1 of Article III of the Rules
Board of Governors was taken by of Fair Practice.
These letters,
Herrick, Waddell from the adverse commonly known as the "5% let¬
Spence, Hotchkiss, Parker and
Duryee, Ernest Angelt of counsel,
of New York City, fbr
Herrick, affirming
On
the
of
length in
we
*
'over-the-counter'
to review also the New York de¬
Inc.,
at
just and equitable principles
of trade.
"4. Tn
consent
approval of this Commission, and
was requested that the
alleged
rule be abrogated.
We analyzed these contentions
member, in the conduct
business, shall observe high
standards
the
it
cision,
APPEARANCES:
members
provides in per¬
as follows:
A
of his
have
new
disciplinary
proceedings
above profit; and if he acts as
agent for factors, of which the
percentage
described, similar proceedings had his customer in
any such trans¬ of mark-up is
only#i one." We also
been instituted on October 9, 1944,
action, he shall not charge his cus¬ emphasized that in our
opinion
by
District
Business
Conduct tomer more than a fair commis¬
Herrick, Waddell.
Those proceedings are not before
us for review but
they form part
of Association
on
trict No.
York
Setting Aside Action
of its rules
Board of
Conduct Committee for Dis¬
ness
OF
WADDELL
of the
to agree upon a determination, the
action taken by the District "Busi¬
Matter of
of the statute
and the Association's rules which
Article III of the NASD's Rules
of
being equally divided
unable
and
case
APPLICATION
supported by the gated in violation
1, Applicable Standards
in opinion as to the merits of the
FINDINGS AND OPINION
is
and
lows;
SECURITIES
its decision
evidence. 3
the
to
members
SECURITIES
Ruling in Herrick, Waddell Case
Board of Governors of the NASD.
After
taking further testimony
the
•
appeal was .taken by Her¬
Waddell from the decision
Thursday, April 3, 1947
has
{
Volume
v/ill
be.
fixed,
165
but
no
the
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4582
specific
customer
price
is
in¬
being
sufficient evidence respecting cus¬
are
tomary mark-ups.
dence.11
formed that the price to him will
depend
the
the market price at
firm purchases the
upon
time
the
security. When
order is
an
placed,
security is purchased by the
the
firm to fill the order
promptly
possible and the transaction is
confirmed to the customer by a
confirmation
which
sets
forth
whether the security is listed, that
as
as
the
firm
is
acting, as principal,
firm's mark-up Ion the
the
and
To establish
standard respect¬
a
The
firm's
commissions
these factors in the firm's business
we
did
such
security at the time of the
transaction, the expense involved,
charging
involved here is essentially one of
business
ethics.
And disclosure
related to the market." This state¬
itself is
of
and the fact that he is entitled to
ment in itself indicates the Com¬
cost to the report¬
ing members other than Herrick,
It does not appear
from the opinions of the Commit¬
tee and Board of Governors that
ups per se were
ing and is therefore pertinent to
any question of ethical conduct.
The presence in the instant case
unethical and that the additional
of
the factors
evidence
mark-up
hibit
the
forth
set
mark-up
amount
over
whether
cost
other
the
reporting members also approxi¬
to
mated the
50
to
60%
at
prevailing market price
time of the purchases by
the
their
customers.
the
In
of
case
of the firm's
mark-up. The high¬
paid in any year were
Herrick, Waddell nearly all
est salaries
chases
$12,000 to
each
the customer's order and the evi¬
The
firm's
of
two
officers.8
operations
the
over
six-year
made after
were
pur¬
receiving
riod, but
reporting members in the District
of Columbia maintained a posi¬
whether
to
tion
broader
no
than
securities
in
comparable
prohibition
against fraud, and that disclosure
obviates fraud.
Secondly, on the
assumption that the rule does go
farther
and
which
activity
encompasses
while
not
fraudulent
may
still violate fair trade practices, it
asserts that the District Commit¬
tee
failed
introduce
to
respecting
evidence
required by the rules.
It
con¬
tends that, in arriving at a deci¬
sion on the reasonableness of the
prices
charged,
failed
the
consider
to
aspects
of
the firm's
a
smaller
or
prevailing market
Herrick,
Waddell's.
over
than
Since
mark-up
price is
determination..
not based
is
case
of fraud
such
any charge
involved in
on
was
as
prevailing
over
Charles Hughes & Company v.
Securities and Exchange Commis¬
(1942),
In
those and similar cases we have
held that in transactions between
tation that the
price at which the
security is a price
which is reasonably related to the
prevailing market price and that
any variance therefrom, without
dealer
sells
a
full disclosure of the variance, is
a
material and fraudulent mis¬
representation.12
In the instant
case, however, the record contains
evidence, not controverted by the
NASD that in all
significant tions
the
which
the transac¬
of
the subject of the
are
charges there was prior disclosure
of the capacity in which Herrick,
evidence
its
presented
the
before
NASD did not provide a standard
to amount of mark-ups
as
which
sufficiently
was
constitute
a
finding that
dell's
charged
clear
oasis
proper
to
for
a
of Herrick, Wad¬
any
mark-ups
were
unreason¬
Waddell
aside
even
from
ficiency the evidence
this
was
insufficient to support the
customers; its limited underwrit¬
were
made by
de¬
clearly
mark-ups
contemporane¬
over
question
therefore,
no
fraud; the issue is
one of the reasonableness
solely
of
of the
mark-up under all the cir¬
cumstances
and, more broadly,
one of business ethics.
Aiid, while
an undisclosed mark-up which
is
excessive
so
to
as
constitute
might nevertheless violate
business* ethics, it does not follow
that the same mark-up, accom¬
finding panied^ by full disclosure, is al¬
ways
a
violation
of
business
the NASD that Herrick,
Waddell's
to act and of
There is,
cost.
fraud
But
purported
mark-up
ous
not
able.
business and relations
with customer!;, including the spe¬
cial
advisory service
rendered
unrea¬
ethics.
Accordingly, properly to
determine
whether
the
NASD
rules have been violated
nence from
taking a position in
securities, factors assertedly tend¬
ing to provide more free and un¬
biased advice to customers; the
of the 39 transactions"
tions, the mark-ups taken by Her¬
requires
a
consideration not only of the
size cf the mark-up but of all
pertinent circumstances, including
disclosure, bearing on its reason¬
small
rick,
ableness and
ing
activities
size
action
of
and
the
handled
.comparatively
customers'
absti¬
general
trans¬
average
by the firm; the
slow turnover in
accounts;
the
cost
of
doing business with widely dis¬
persed
net
customers;
loid of
despite
years
salaries.
over
erred
in
rather
treating
than
includ¬
as
as
an
mark-ups based on such prior dis¬
closure to and agreement by the
customer.
Waddell
4. Discussion and Conclusions
Our examination of the record
leads
case
us
conclude
to
that the NASD's findings are not
by
the evidence taken
before it and
that the NASD did
supported
not
properly interpret or apply its
rules governing mark-ups.
We
agree with the NASD, in answer
to
Herrick, Waddell's first
tion,.
,
fraud.
that
its
"But
we
rules
conten¬
beyond
with
go
cannot agree
the, method followed by the NASD
in preaching - its
conclusion that
Herrick^ > Waddell's conduct was
.
contrary to* J just and equitable
spripcipfes, of trade. Not only did
the
NASD's i presentation
case
aftd'the district Committee's
of
its
op^niop
both I follow the under¬
lying {theory,* which we disap¬
proved in our opinion on the "5%
letters." that mark-ups in excess
©f those
customarily charged
are
inr themselves conclusive proof of
violation of the NASD's rules,/but
in. : doing
so
they relied
two
officers
in
upon
in¬
also received extra
1940,
1941
primarily
out
of special
profits in those years.
and
1943,
underwriting
questioned;
within
were
other reporting
three
the
firms, and in the
exceeding
While
that
the
range
ex¬
greater percentage
a
Herrick, Waddell's transactions
of
mark-ups in the higher
reported than did those of
ranges
its
competitors,-
does
not
that Herrick.
were
this
warrant
fact
the
alone
conclusion
Waddell's mark-ups
unreasonable in all 39 trans¬
actions.10
We
which
have
been
unable
evidence in the record
these
cures
inadequacies in
the NASD's case, and
accordingly
conclude that the NASD's findings
transactions.
Herrick, Waddell claimed that its
highest mark-up (11.4% in one trans¬
action)
was
charged through an over¬
sight. The NASD did not challenge this
explanation.
We do not
to
that mark-ups
are
proper merely because they fall withing the range of those taken by other
firms in the vicinity, for that range
may
itself include mark-ups which are viola¬
tive of fair practice standards.
But in
determining here whether the evidence
introduced supports the NASD's conclu¬
sions, it is appropriate to compare the
range of Herrick, Waddell's transactions
with
mean
of
those
the
say
other
reporting
mem¬
bers.
10 The
danger
of
giving
conclusive
weight to the use of percentages in com¬
paring Herrick, Waddell's small sampling
(50
transactions)
larger sampling
with the results
combined
from
of the
16
other
firms
(525 transactions)
is emphasized
by the fact that numerically 5 of Her¬
rick,
Waddell's
transactions
were
at
mark-ups of 8-10 percent (10% of the
transactions) and that 5 transactions
of
the
cent
525
(1%
are
way among
the
16
were
of
at
spreads
of 8-10
out
per¬
the
transactions K
But the
distributed in an undisclosed
16 firms, and do not preclude
that at least one of the
possibility
had
a
distribution
curve
that of Herrick, Waddell.
similar
to
the ethics of the
The
record
eration
not given by
was
trict Committee in this
as
a
We
of
are,
the Dis¬
case.
accord
in
course,
their conformance to
standard
we are
business
of
fully
a
ethics,
high
and
of the difficul¬
aware
ties involved in the successful
complishment of those tasks.
ac¬
But
that direction must
due regard to the
rights of individual members. The
any efforts in
be made with
District
that
Committee
here
stated
its
findings were made "in
the light of all the circumstances
in this case" but this statement is
not
out
borne
by the remainder
of the opinion.
The opinion la¬
the
evidence
of
pertinent
circumstances introduced by Her¬
rick,
Waddell
treated
it
in
as
a
"defenses"
summary
and
manner.
It gave no
weight to the estimates
by the -firm of the
percentage of its total expenses
introduced
allocated
to
investment
service
and
research, stating, without any
analysis to support such conclu¬
sion, that "an inevitable part" of
the alleged research expense was
"directly attributable to sales ef¬
fort
rather
than
to
investment
research work." Instead of direct-
basis
evidence
does
not
disc'o-"
for
selecting the 39 out of the 50
reported. Our opinion is not
to be construed as saying that the NASD
cannot condemn a general course of con¬
duct evidenced
by a number of trans¬
actions, but if that is the theory cf the
case, it must a fortiori give careful con¬
sideration to evidence of the general con¬
duct of respondent's business.
See pp.
transactions
10-11
infra.
12 See
386
also:
.
Duher
&
Dttker, 6 S. F. C.
(1939); Trost & Co., Inc., 12 S. E. C.
531 *(1942);
Lawrence
R.
Leeby,
13
S.E.C. 499 (1943).
involved
the
in
relationship
be¬
tween such firm and customer. As
have
indicated,
the
*•
question
indicium of fair deal¬
an
disclosure
of
the
well
as
as
of
amount
the other facts
circumstances
and
specting the, disclosure made by
Herrick, Waddell to its customers
of the profit taken was given no
consideration
which
The evidence
re¬
whatever, the opin¬
stating that "disclosure is im¬
to the question whether
ion
material
Association
rules
been
have
-
the business of
the
Committee, composed
of active competitors of an ac¬
cused firm and engaged in the
delicate task of policing their own
industry under the :statutory
apply its experience and
knowledge to the evidence before
it. In doing so, we recognize that
the industry may properly protect
itself against the so-called "high
cost" or "submarginal" producer,
whose
excessive
cost
of
doing
business results from inefficiency
or unduly high overhead and com¬
pels his charging unreasonably
high prices to show a profit. How¬
ever,
where it can be demon¬
strated that higher costs are due
to special services performed by
the
member
for
the
customer,
and that in all other respects, i. e.,
salaries, overhead, commissions,
and net profits, the firm is oper¬
ated conservatively, it should be
concluded that prices which ex¬
ceed those charged by competitors
not rendering such special services
not in violation of the NASD's
are
rules, if the excess bears
able
relation
to
the
a reason¬
cost
the
of
special services.18
We
show
over
that
introduced
is
member's
a
that
say
to
mark-ups
prevailing prices have great¬
those customary in
exceeded
the
vicinity, the NASD has the
obligation to explore all aspects of
such member's business to ascer¬
the
relevant
of
NASD
circumstances,
must
give such evi¬
consideration in de¬
termining whether there has been
a violation of its rules. And where,
dence proper
in this case,
it does not appear
that the mark-ups are in them¬
selves clearly and substantially in
excess of those customary in the
vicinity, the NASD has the af¬
firmative duty of exploring the
questioned transactions and all
as
pertinent
circumstances
reaching
before
conclusion
any
reasonableness
the
on
the
of
mark-ups.
In such examination the fact that
the
member
has
the
disclosed
amount of his mark-up to the cus¬
tomer is not only material but is
of considerable importance.
a
When
securities firm rendering more
the customary service dis¬
than
closes to its customer the mark-up
it
will
make
on
the
transaction,
the customer is enabled better to
choose between the services
dered
by that firm
NASD
13 The
ren¬
what is
and
of
(C)
of
1940
"any broker
such
of
the
or
advisor.
investment
Act
the
Section
202
(a)
Investment Advisers
from registration
exempts
or
dealer whose performance
is solely incidental io
services
conduct
dealer
of
and
his
who
business
as
receives'
a
no
broker
special
compensation therefor";
The question
whether Herrick, Waddell comes within
this exemption
is not an issue in this
proceeding and we deem it unnecessary
and
inappropriate on the basis of the
present record to express any views on
that question here.
14 Cf. Sherman
Gleason,
(1944), Securities
Release
No.
supplied,
described
and
these
be taken
the mark¬
over
in each transac¬
whether the accused firm's mark¬
violated its rules.15
In
summary,
the
evidence
port
the
found
have
we
that
present
does
not
sup¬
findings of the
NASD. Although the NASD found
the mark-up in "each and every
one
of the 39 transactions" un¬
reasonable,
that
the
well
ported
evidence
of
many
were
the
within
the
range
re¬
And
we
by other firms.
have indicated
shows
transactions
substantial defi¬
a
ciency in the evidence introduced
relating to the transactions of such
other firms.
We
failed
weight
the
also
have
NASD
found
to
that
give
the
proper
required by its rules, to
as
evidence
cumstances
of
surrounding cir¬
in
presentation
the
of
record.
the
The'
NASD's
case
and its
opinion indicate that pri¬
if not entire emphasis was
placed on the amount of mark up
mary,
taken,
that
although its rules require
pertinent circumstances
all
be
considered
in
determining
up
is
proper.
In making such determi¬
nation, the type of business en¬
gaged in by the accused firm, the
given
a
mark
of its customers, the serv¬
performed, and the type of
nature
ices
disclosure
made
considerations,
relevant
all
are
\ *
>,
«
>
We have considered whether
not
should
we
on
or
additional
take
evidence ourselves
the hiatters
on
which the present record is de¬
ficient and undertake correctly to
apply the rules of the NASD toy
the facts established by such aug¬
mented
record.
We
have
con¬
cluded that it is
with
the
supervised
in keeping
more
legislative
industry
scheme
for
regula¬
self
tion embodied in Section 15A that
the NASD itself undertake to
cure
the
inadequacy of the evidence
presented by it and the errors
made in relating the evidence to
its rules as interpreted by it. This
we
view as a preferable proce¬
dure from the point of view of
both the NASD, which is attempt¬
ing to develop industry standards
and Herrick, Waddell, who will
thereby have a voice in any ef¬
forts by the NASD to develop and
apply to it
a
standard of industry
losing the right
without
conduct
to
this
have
Commission
pass
such
any disciplinary
action which the NASD may take
against it.
We shall accordingly
the
upon
standard
correctness
and
of
of
set aside the NASD's action in this
has
suggested that if a
firm furnishes an unusual type of invest¬
ment
advisory service
its charges
for
such services should be segregated and
it should qualify with the Commission as
an
to
ups
tain whether such
mark-ups can
possibly be warranted by special
circumstances.14 But, even in such
cases, if the member offers evi¬
it
tion, should therefore have been
given consideration by the NASD
in arriving at its determination
whether
to
mean
evidence
where
ly
not
do
allegedly
that
tiating with them
scheme established in Section 15A
must
it
fact
features to its customers in nego¬
up
A District
(11)
11 The
and thereby tends to remove un¬
pertaining to
Herrick, Waddell,
including the unusual type of
business which the firm claimed,
the
special
investment
advice
as
mark-ups.
dence
with any efforts of the NASD to
establish
for
its
members
and
belled
9
on
whole indicates that such consid¬
secure
involved
latter 5
8 The
compensation
one
of spreads charged by the
range
to find any
in this
every
but three of those transac¬
the
element bearing on the fairness of
£>
and
mark-ups were not greatly in
ing disclosure of its mark-ups
"immaterial"
"each
cess.9
moderate
firm's disclosure practice
In ail
in
pe¬
a
It also contends that the
Committee
sonable
low
the
and
profit of the firm
sidered
for
It is important to note that this
spread from the point of view of
fairness of dealings with custom¬
ers
in principal transactions, the
Committee
all
by
involved
greater
price
market
purchased
cost
or
to give proper weight
or
to other "relevant circumstances"
as
their
over
other
the
whether their mark¬
cr
up
mark-up
a
not
or
customers
Waddell
their
dealers and members of the pub¬
lic there is an implied represen¬
as
The first contention of Herrick,
Waddell is that the NASD rule is
ate
unreasonable and
merely to be con¬
possible "justification"
was
tomer
stock
Herrick,
given appropri¬
consideration in arriving' at
were
reasonably
"not
mittee's conclusion that the mark¬
violated."
approximately the mark-up
prevailing
market
price.
However, there is no evidence
of
."
.
"justification" for
prices
the
over
Contentions
.
affdrd
Corp., 11 S.E.C. 601
taxes, of $1,320.63. Dividends were
paid on the firm's 6% preferred
3.
profit.
not
substantially the same as the
prevailing market and the spread
between cost and price to the cus¬
dence shows that the firm's cost
was
no dividends have ever
been paid on the common stock.
a
circumstances, including
sion, 139 F. 2d 434 (C.C. A. 2,
1943) and William J. Stelma'ck
period, 1939-1944,
in¬
cluding
underwriting
activities
which produced profits of $69,OGO,
showed a deficit, after Federal
during the first three and
one-half years of the six-year pe¬
Such dis¬
market conditions with
respect to
by Herrick, Waddell and
competitor members in the
area
who
reported
principal
transactions.
As noted, this ex¬
cated
from
developed by Herrick,
evidence
the
prices
the 16
dis¬
receive
cir¬
relevant
pio¬
salesmen
of
cumstances
other
mitted
a
,
as noted above, Sec¬
Article III of the rules
the
and
fairness which might otherwise ba—
of this
in the adoption
Moreover,
offered him by others.
closure aids the customer to nego¬
tiate intelligently with the firm
these
of
charged conformed to the NASD's
standards of ethics^ the Commit¬
tee's opinion merely stated that
Waddell states that it
closure practice.
evi¬
the
ing itself to the issue whether in
view
by
Waddell's
Waddell, but neither the exhibit
nor the Committee's opinion indi¬
neer
supported
39
ing the amount of mark-up which tion 4 of
was reasonable in the Washington,. requires
the NASD to determine
D. C.> area, the NASD relied upon whether the prices
charged were
its exhibit containing data sub¬ "fair,
taking into consideration all
transaction stated in points to the
nearest Vs of a point.
Herrick.
was
not
(1819)
3550.
S.E.C.
Exchange Act
15 In
the
its brief and
contended
NASD
argument before us,
that the disclosure
of
mark-up made by Herrick, Waddell
was inadequate because it disclosed mere¬
ly
the
point
profit taken rather than
profit stated in dollars
the amount of its
and
cents.
appear
NASD's
of
contention
would
the disclosure and its
disclosure
not
taken in view of the
inquire into the ade¬
to be well
failure to
of
quacy
tion
This
as
disposi¬
"immaterial"
to
its
however, that when
disclosure is inquired into as a material
factor
in
measuring
reasonableness
of
mark-up, the extent of the disclosure Is
properly
given consideration.
And w«
agree,
too,
that
disclosure in
dollars
and cents would in most cases be more
inquiry.
helpful
merely
We
agree,
to
customers
in points.
(Continued
on
than
disclosure
£
page
40)
40
(J820)
THE COMMERCIAL & FINANCIAL CHRONICLE
SEC Reverses NASD Ruling in
The Labor Governments Failures
if
opposite mock at
they
virtue
it
result).
ORVAL L. DUBOIS,
Secretary.
(Seal)
(Chairman
fered
in
by NASD in Disciplinary Proceedings
Mark-ups Over Cost Reported by
Certain
they
Co., Inc.
of
reporting
Total
>
Total
PCr
Schedues
filed..-.
"no
6
and
transactions
not
over
not
over
3%
Over
37f
Over
not
21.0
16.6
——
15.3
6.0
4%—
18.3
5%
20.0
4.9
10.0
4.5
32.0
8%
1.7
0.5
—
lOVc
and
above-ii-iii-
__
Statement of Herrick, Waddell
.17.
'
'
free life
19.8
better
following statement was is¬
by Herrick, Waddell
Co.,
Inc., following the release of the
foregoing SEC decision:
amount
of
to
the
by that firm
him
negotiate
by
intelli¬
such firm
have
and customer.
indicated, the
tion involved here is
one
of
business
disclosure
of fair
itself
an
to
any
ethical conduct.
j
And
indicium
dealing and is therefore
pertinent
question
of
"Mr. Herrick stated further that
his firm is in full
sympathy with
the
National
Association
Commission in its decision vindi¬
in
the
/
purchaser of securities of. the pre¬
vailing, market price and of any
constructive program
by makingthree reductions omits own
initia¬
tive in these
charges
addition made by the
past five yeqrs."
disclosure should be made to
a
selling firm
for its services to the
customer.
;'"'This issue of full disclosure',
said Mr. Herrick, 'has
sharply di¬
vided the ,ranks of the
Association
and of its board of
governors for
several years, and the decision
of
the Commission will
go
far to
support
those firms who
have
insisted that
a proper
regard for
the interests of purchasers of se¬
curities requires full disclosure
of
mark-up as one of the many im¬
portant facts concerning
any secuI believe that the entire se¬
curities
industry will welcome
this decision ai
settling an issue
which has been
hotly disputed for
at least four
years.
J Commission's
ness of a
not
only
that
the
decision
reasonable¬
profit mark-up depends
upon
the amount by
which that
mark-up exceeds the
market cost
prevailing at the time
security is sold to the cus¬
tomer, but also upon all relevant
the
circumstances,
which
necessarily
include the amount and nature of
services rendered to the
investor.
The evidence
showed,' Mr. Herrick
observed, 'that our charges were
fully justified by
our
investment
service to customers.'"
"In its opinion the
and
Securities
Exchange Commission
part:
.
-
said in
-
...
fac<.
ber has
,
•
.
mem_
disclosed the amount of
his mark-up to the customer,is
not only material
but is of con¬
siderable
securities
.than the
importance.
firm
generous
used
for
for
the
a
which
distortion of trust
ordinary British
breach of
or
fair
play.
It
that malversation of wartime
rifices, that "fraud
has
sac¬
the power"
the nation
in
on
riven
and
is
rendered
it
incapable,
while the abuse continues, of over¬
coming and surmounting its many
problems and difficulties.
.
When
rendering
a
more
during the
Lower
Level
mental
DETROIT, MECH.
broker
of
securities
mission,
will
associates
of
Harry
an
you any
in these
world,
round.
There
are
appointed Com¬
United
States
Exchange
be
honored
the
Detroit
Com¬
by his
Stock
for
our
the
new
needs.
Food
are
we
on
better nourished than
Minister
the
whole
ever
before,
much
not
sympathy can be ex¬
from international bodies
pected
are
told, of course, that our
people get another
types.
where.
calories
1,300
outside
foods
from
rationed
the
Well, I should like to know
To get 1,300 calories each,
persons would have to eat 5 lb. of
potatoes or 8 lb. of cabbage every
rights day, and which of us, I should
when like to know, except perhaps the
our own
Of course,
British
that
says
our
to be able to stand up
seem
ourselves, for
and
We
in¬
bodies of great power
nowadays, and undoubt¬
edly they wil continue. * We do
not get very well treated on these
do not
nation has now to re¬
ceive?
power
and force
dealing with
a
tries who
not at all backward
are
number of
coun¬
the Board of Trade,
President of
would
that
do
if
even
could
we
buy such quantities of vegetables
and could afford to pay the price
which is
I
being charged for them?
quite prepared to take my
am
share of whatever the British na¬
in
making their claims and dilat¬ tion subjects itself to, but not ne¬
ing upon their woes. Let me re¬ cessarily to contemplate receiving
peat what the Chancellor of the with composure the consequences;
Duchy of Lancaster is reported to of the mismanagement of the right
have said the other
day:
hon. Gentleman and his colleagues.
"Already in this country the
people are probably enjoying the
highest standard of living in the
world. We are not even suffering
from as many shortages as people
would imagine."
What
fore
chance
these
have
we
international
be¬
got
commit¬
and
Radical quarters about any¬
thing which got more food to the
people. It has always been a point
they championed.
But now the
Government's
people
our
Socialist
policy
first and the welfare of the
comes
second.
comes
people
I
that
say
less well fed in this
are
central theme of-.thpught; ramshackle
matters,
I
as
I have put it, but it will
as
a
was
no
in
There
bread
was
shortage
no
and
wealth-
Denmark.
They are three
countries which have just emerged
from long years of Prussian Ger¬
Nazi
man
rule.
I
British
repeat that the
under-nourished
are
people
today.
This
work and falling-off
individual output to which at¬
lethargy in
in
tention has been drawn from every
quarter of the House, is only part¬
ly due to Socialist teachings. It is
mainly due to a shortfall in the
necessary
calories in respect espe¬
low
this
as
is
scandal
a
and
a
shame.
The whole business of
purchas¬
food and other commodities
the State, that is to say the Gov¬
ing
officials
ernment
Ministers
and
involved, have already shown a
lack
of foresight and judgment
which
plainly reveals their in¬
I
which
that
assert
have
trouble
and
Food
I
the
caused
us
misfortune,
both in "bread and
coal, are merely
marginal and could have beer,
provided against by treasonable
foresight and prudence.
other, animated by thb'brofitmo¬
tive, and corrected constantly by
the fear of loss and by the contin¬
ual elimination of the
That
is
that
the
wanton
here—destruction
it
there was no need for
rationing with all its incon¬
say
bread
veniences
our
so
the
and
additions
tc
clerical staffs and paper forms
dear to the hearts of the party-
opposite.
for
all
I
there
say
was no
inconvenience
this
need
if
omit
the
Issue
inefficient.
general principle. I say
and partisan—
this is only an incident j but I can¬
a
not
and
need for the break¬
coal.
shortages
much
arise?"
question
little while.
a
for
so
a
that
answer
of
merely' producing apparatus than are the
harassed Gov¬ populations of Holland, Belgium
difficulties
as
structure
or are you
taking points off
there
A.
cor¬
victorious but precariously
bal¬
give hon. Members opposite, anced island, with its magnificent capacity as compared with private
opportunity to cheer it—"Have but at the same time delicate and. traders competing with one an¬
need
securities
the
do
and I
bluntly
the
and
It may be ask¬
perfectly fair question
a
down
—-
Detroit
recently
supplies?"
ed—it is
take
Be Honored fli Dinner
Liverpool
of
Exchange
will be for ever held against the
distinguished record of the Presi¬
Cotton
dent of the Board of Trade as an
of
act
folly
of
and
pedantry,
amounting to little less than bad
citizenship.
Coal
we
Of course, now that the crisis had not
Now I turn from bread to coal
Exchange and their guests from
needlessly and wrongfully
the
financial community at a has come, all kinds of emergency given up the basic share to which —[Hon. Members: "Where is the
measures may be
dinner to be. held at the
Minister?"]
I am sorry that the
necessary, but our condition entitled lis, which
Hotel
if we look back to a
•statier on April
Minister of Fuel and Power is not
year ago, it our ships could carry, and which
9, according to
would have been
an
announcement
possible though our money, albeit borrowed, cou:d here. I intend to devote an im¬
by Milton A.
Manley, President of the Ex¬ not easy—many things are not easy last year and this year at any rate portant section of argument to the
matter for which he is! respbiisible.
nowadays—to maintain sufficient buy.•
change.
::: ■
2 V--V. • A
'
supplies to avoid the disasters
l challenge the Government di¬
I cannot, however, consider that
"This appointment of one
^
<
of
our
which have
come
rectly and' in detail, dri thus lobe
issue. We are frequently informec
costly and vexatious that 2,400 calories is the minimum
which has
always been in the
rationing, to which even in the daily amount to maintain a hu¬
forefront of the
fight for higher
crisis of the U-boat war we never man
standards >;of commercial
being in a state of health. It
honor had to
resort, has only saved so was only a few weeks ago that we
and has labored
unselfishly in be¬ far 290,000 tons of
wheat out of a were told in this House by the
half of the
investing public bv total
consumption of perhaps 2,- Parliamentary; Secretary to the
promoting observance of Federal
500,000 tons a year. Why, then, Ministry of Food—who is in her
•md
state
securities laws," said
did Sir Ben Smith
members is
brokerage
a
signal honor to the
professionin Detroit
take
bread.
The
upon- us.
whole
of
First,
this
of
process
.
■
Mr..
give away 200,-
Manley.
It
is
000
expected
that prominent
officials of the Securities and
Ex¬
change Commission and of the
Michigan Corporation and Secur¬
ities Commission will be
present
to join the
partners, officers and
senior
executives
of
tons
of
our
President,
May,
somewhat
in
should
be frustrated
by the evidently cal¬
culated absence of the ' Minister
concerned in any
ter which it
particular'mat¬
is necessary
;t6 raise.
I will address myself to
Minister
far
as
'the'PrUne
pos&'ibld in this
as
matter.
\
Here in
the
case
U £,,r"
of tfpaiHhe &£-►
gument is much clearer than in
that of bread. The saving prdduced
by
this stoppage
all
with
its
of industry,
measureless1- reactions
rations
foreign
jesty's Government had been con¬
vinced, and the Food Ministry
calories, and that from food bought
on
points, another 200* caloriei
could be derived. l,60n calories \r
bur means of fearning- our
in
futurev years; and
averting financial catastrophe, has
been: very small.
What does it
had
needed?
extending
good
pledges of cooperation
000
tons
wishes and
to Mr.
our
another 250,000 tons of
wheat
which
His v Ma¬
ple
in:.
waive
lie Business of the House
claims to
city's
firms
inspire all, if hei
personality did .not
discourage it—that our
agreeable
bank¬
,
would
menour
Why did the Lord
the
ing
agreed allocation
place and whose authoritarian de-
in April, 1946?
brokerage and investment
been
had V for
McDonald, who will .soon
for Philadelphia to take
people
up
customary service dis- leave
closes to its customer the
mark¬ his official
duties. ";
control of these two funda¬
upon
ernment
S. A. McDonald to
missioner
wheels go
ternational
to help
to make the Britisn
of making our case for the
hard-working people of this is¬
of
how
but
cially of the heavy manual work¬
Existence
ers.
All this is quite apart from
land, when it is given away be¬
the dreary, dull monotony of diet
I have hitherto dealt with what forehand
by the Minister? I affirm
which directly affects incentive.
I call the psychological
aspect. I here this afternoon that the Brit¬
Let us put up a fight for John
now come to the material
things ish people today are under-nour¬
Bull's food anyhow—[Hon. Mem¬
by which we live—a lower level, ished.
They are less well fed—
bers: "Hear, hear."] He will make
but still essential for the continu¬
[Interuption.] I have never heard
the sacrifices if he is called upon
ance of existence.
I will first deai much
anger expressed, in rr>,v long
to do so. but to run him down as
with bread and coal.
I shall be experience, from the Left
Wing
will
McDonald,
the
even
tees
Britain's
told, "You complained of too much
attempt to bring about
regulation.
You, Mr. Churchill,
progressive reduction in
the% complained of too much
regula¬
charges made to securities cus-*
tion about bread, and you also
tomers, especially in the rates and
complained of too little regulation
amounts
of mark-ups added
to
about coal.
Where do you stand
prevailing market prices for any
cating his firm in its controversy special services rendered, such as
with the Association, has
He said that
upheld 1 his firm; provides.
tpe principle long advocated and ! the firm has
effectively demon¬
strated
its
practiced by that firm.-;|hat full
sympathy with this
'The
the
of
opposite
they
were
given. Rarely has there been such
ques¬
essentially
ethics.
is
taken
been
purpose
which
we
the world
so
securities; latter's
in
"Barrett Herrick, President of
Herrick, Waddell & Co., Inc., said
that the Securities and
Exchange
pointed out
have
twain
As
plaint brought against that firm
by the Association in January,
1945.
The issues raised by this
case
have
been
hotly disputed
mark-up
transactions.
between
offered
tween
action of the National Association
of Securities Dealers in a com¬
that
is
been
by tends to remove unfairness
which might otherwise be in¬
volved in the relationship be¬
on
an
appeal laid before
by Herrick, Waddell & Co., Inc.,
of New York, setting aside the
of
here
our
impulses of the nation and the.y
gently with the firm and there¬
it
the
choose
customer
and Exchange
yesterday
(Friday,
an opinion and
been
known
has
others. Such disclosure aids the
issued
have
have
we
1.0
what
and
order,
sues
nation, destructive of the
—>
,
rendered
services
Securities
profit mark-up and the disclosure
the
1.9
to
have
to
cease
a
long, and paralyzing to
4.4
up
within the securities industry for
several years.
The principal is¬
and
purposes
native
enterprise and energy. Advantage
*'•:
it will make on the transac¬
tion, the customer is enabled
&
The
Commission
life,
6.0
J) Co., Inc.
March 28)
deep
is that
10.0
sued
"The
island
our
institution of
of
'
but under 3%
under
10',i
the
19.1
22.0
8'M
Over 6%
..
in
16.2
10.0
over
over
over
mean,
this
caused
system of
Socialism abhorrrent to the mass
<
4.0
19.7
not
5V<
has
exploited for party
525
15.1
——
and
so
-
50
not
■'f'Over 4'I
what
for
2%
Over 2%
odious
is
for the victory of the world cause
of freedom—should be used and
,
575
_
J,. Over 1%
-
,
Mark-up— 1
under..—
what
But
this sacrifice so nobly made for
victory—not only for our own sur¬
international bodies, anyhow. We
vival and
self-preservation but
Co., Inc.
.
23
—
computable
cent of
world.
get,
they can
statements
anybody Jthe food
mining the physical, strength of respond with the arguments which
our population that we ourselves
are used to make us content with
have to join the ranks of those the diet which, without having
who were broken by the war and committed
great crimes
in the
Excluding
Herrick, Waddell &
Co.,
17
transactions"
the
no
schism
~ Inc.
.
that
is
far under¬
so
District of Clumbia
Waddell &
Including
at
Perhaps it may be argued,
light of history, that she
the
particularly
Member
herself
saved
wisdom in
or
and
Herrick,
Herrick, Waddell &
Number
worth.
were
There
generous.
are
1944
Response to NASD Questionnaire in July,
District of Columbia
dumber
single afternoon, of¬
they had and all that
one
all
saved
Introduced
Percentage
in
time.
A
and
renters
Britain
APPENDIX
Firms
were
ment
in
Showing
Germans
the
of
two-thirds
jorities in both Houses of Parlia¬
missioner Hanrahan concurring in
deems appropriate.
An appropriate order will issue.
Exhibit
explained to Parliament.
4
merely the basic ration, and that
ought not to be forgotten, nor
grinned at, that Conservative ma¬
and
,■
By the Commission
properly
Commissioners Mc-
Caffrey
steps
as
been
never
Connaughey and McEntire, Com¬
case and remand the record to
the
NASD for such reconsideration of
the case and such further
opinion
exploiters,
profiteers.
It
us as
have
Compassion, charity and gener¬ getting rations varying from 2,550
osity are noble, virtues, but the calories to 3,990 calories. I hope
Government should be just before it is true. I would not begrudge
rack
(Continued from page 39)
this
which
(Continued from page 7)
Henick/Waddell Case
consistent with
Thursday, April 3, 1947
the
convinced,
Here
that
: we
our";
under
which'/were
wind
last
our
were
could
-
peo¬
all.:
450,-
Duchy—he
have
mean
nourished
whistled down
year
for
gave
reasons
Yet
the
us
less
than
Chancellor
has
gone—I
to knock him out
1,40(
livelihood
of
the
amount
did
noi
nad
quickly.
Duchy was
because the Germans
The Chancellor of the
so
upon
,
to?
was
Minister.
The
given to
He
only figure we
by the Prime
us
said
there >
was
a
saving of 550,000 tons at the elec¬
trical generating stations. That is
challenged
on\y got, as was said, 1,550 calor¬ much less than a single day's out¬
ies.
He explained that this was put
of the-mines.
How
much
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4582
165
Volume
I add for the other direct
should
winter
consumption.
All
through;we got through to the spring with-
ii saving: two, three, four days' out-. the war, we succeeded in keeping
2 put? The Government have not this reserve intact, i The President
told us. Perhaps I Should say it is of the Board of Trade stated in
four days—five at the very mcst. his
comprehensive speech
two
That is all we have saved by the days ago, that during the war we
whole of the inconveniences and had steadily reduced our stocks.
hardship inflicted on the domestic That is quite untrue. '
consumer and the stoppage of in¬
The President of the Board of
dustry, leading, mind you, to a Tiade (Sir Stafford Cripps) indi¬
rise in unemployment only just cated dissent.
short of the previous high peak
Mr. Churchill: It is no good the
of unemployment, the last time a
right hon. and learned Gentleman
Socialist Government was in of¬
shaking his head; he cannot alter
fice in 1930.
It is no-pleasure to me to hit the
Minister of Fuel and Power now
.
that he is down—I do not know
is out
whether he
not, but he
or
is certainly not here.
I must, how¬
mark his total lack of fore¬
The misleading statements
which he made repeatedly are so
ever,
sight.
that
notorious
will
I
trouble
not
the House by quoting them, though
I have them here., They have cer¬
.
tainly robbed him--T say this seri¬
ously to the Prime Minister—of
the credence and confidence of the
Everyone knows he is a
straight, honorable man in
private life, but no one will be¬
public.
very
lieve his statements about the coal
situation in future, and no state¬
ment that he makes will receive
the slightest
attention. It is
a
mat-
ter which certainly should be con¬
;
which
perhaps explains his absence from our Debate
sidered,
v
this
and
He failed
afternoon.
to
per¬
suade the Cabinet in good time or
country for the daily consumption,
in the winter of 1944, were larger
than
in
those
1939.
the inter¬
In
vening years between 1939 and
1944 they were larger still.
Why
say to the House that
had eaten into, or worn down
then, did he
it
as
book for which he should
a
have
credit—"Socialism
the
gets
things done"—as if he had pub¬
lished this book, brought it out.
Why,
this
very
return,
this
"Digest," was brought into being
at my wish, in the autumn of 1940,
there
as
There
-
If
the
1946 189 million tons of coal.
year
•
in
produced
were
had had-only 4 million or
we
5 million tons more, we
could have
got through without this disaster,
-
and with something in hand. Five
million tons extra, and we should
:
have
-
through
come
this
hazardous winter without
.
a
hard,
break-
-down. The. plainest warnings were
_
given. It is remarkable, lookinjg
back, how often the figure of
.
•
million tons of coal
-
ed.
Belatedly,
was
mention-
Minister of
Fuel and Power, himself, realized
•
the
.
it—"What stands between
:
and
this winter?" he asked
success
.
us
on
September 26 vof last year* "A mat¬
ter of 5,000,000 tons of coal" On
that coal, he said, depended the
-
h
f
salvation of this country. And Mr.
i
Horner—Comrade Horner—speak-
J. ing at
coal production conferat Edinburgh on October
ence
a
.said:
•
of which the industry might be
short, there will be a consequeniial
:
loss
of
employment to
more
■
than 1,000,000
'
There
people."
was
the Government allowed its Minister
of
Fuel
or
its
President
an
obvious act,
ing or
Otherwise during the
of these. 9 millions
with■,
some
rate
more
attention, there are
facts in it which have at any
his
escaped
The first
omniscient
is that there
one
eye.
was
no
inroading of stocks under all the
cruel, hard necessities of the war.
The figures can be found on page
20. For the first time, in the dawn
,af 1945, the National Government
of those days saw the red light.
We have a record of what happen¬
ed at the turn on that year. The
usual coal scrutiny was made, as
it. ought to be made by the re¬
sponsible Ministers at the head of
the Government, 10 months before
the event. It was reported to me
that Ve should have in AprilApril is the key month, because
then
turn from the winter ex¬
we
penditure to the summer scale in
the
coal year—only
10 million
tons instead of the normal 12 mil¬
which
tons
considered
therefore
had
always
minimum,
and
we
the
it would
difficult to
be
build up to more than 16 million
tons by the end of October. Look
that
were
January,
1945.
Those
rough days. The Von
—
very
offensive
Rundstedt
launched
been
was
in
still
in
progress.
had
which
the
Ardennes
We
were
year,
vised, to the Minister of Fuel and
Power—my right hon. and gallant
kept
Friend the Member for Pembroke
at
home, or 5 millions imported in
gpod time,- would have saved us
from a breakdown in the whole of
(Major Lloyd-George) the bearer
a
famous name—stopping all
of
further
commitments
to
export
productive industry which will coal, even to the Armies, without
us directly tens of millions my express permission.
and,,indirqctly, hundreds of mil¬
•0(ur
;
:
cost
lions In
our
v
Itr is'
no
It is
new
topic. We watched
yearcQf the war. We took the nedecisions each
oessary difficult
year in good time. In January or
February you must always make
sure that you will be
able, by the
winter, to build up your stocks to
the normal 18 million tons of coal
,
•
thereabouts,
that
do not
-drop below the distributional min¬
or
Seriousness
the,Productive energies of
people.
the coal position vigilantly every
imum
on
so
account
of
you
any
extra
had
Monday I asked whether the
rise
National
had
the
Government, followed by
Conservative
Government
at
the beginning, and the right hon.
Gentlemen opposite at the end.
What happened then?
In
April,
1946,
the
stocks
so-called
down
distributive
less
than
million tons—smaller
seven
than
were
to
in
of
the
consumption of electricity
been offset by the cor¬
responding reduction in the do¬
not
mestic
right
consumption of coal. The
hon. and learned Gentle¬
man's
answer
"No Sir.
is
man
not
was:'
The right hon. Gentle¬
quite
been
•
,
There
wrong.
to
measure
check
the'
supply of
Army when we were
great operation. It is
not
been
damaged or de¬
bombing.
Beride3,
should; live and learn.
We improved a lot of thins s in
the war .which, h-;s
just finished,
stroyed
has
a
—
by
everyone
,
from
the
1914-13
mistakes
war.
possible... with
energy, ingenuity
and good will, for the Minister re¬
sponsible
the vast,
to
enterprise
ities,
the
and
which
by
in
recent
that
can
dropped
than four million tons, there was
a net reduction of 10 million tons
in 1946 as compared with 1938,
rapid
again
author¬
before
years
producing
good kind for letting
a rate four times as
as
coal for electricity works
increased by about 11 million tons,
from 15 million to 26 million tons.
But of this, as the Secretary of
sale,
local
the
war,'
ernment
can
a
or
in motion
set
flexible, complete system
building, both by private
of house
tion of
we
having
the
ought
a lot of the mis¬
takes made in the last
peace, in'
the one which has now come'
fo
us.
I am sure it would have been
always rely on them
little up their sleeves.
The
quartermaster spirit is not
lacking in the ranks of the British
true
a
ii
we
to have rectified
houses of
the
to
pushing
made
Certainly
1946, they got only 31 million tons
of coal—a drop of
nearly a third.
In the same period the
consump¬
fuel
For
a
to
million
seven
tons.
it must have been ob¬
year
vious
that,
measures,
without /exceptional
we should never reach
the desired 18 million tons by the
autumn. That was the time when
whatever
and
of
of coal were exported in bunker-
Presi¬
On
the
weather.
weather has added
public.
preparing
to
cross
the Rhine.
the Board of Trade to export 9 Everything was being strained for
million tons, no doubt with very that. Nevertheless, at that moment,
good reason, in this same year. rather than fall below the min¬
Ho doubt the reasons were1 good imum precautionary coal reserve,
but, nevertheless, 9 million tons I sent a minute, being well ad¬
■
the
Trade.
discomfort
to the
of all
The
misery
people,
However, while he has made it but it has not altered the march
public, and lectured hon. Members of economic events in a decisive
of this House on not studying it
fashion.
'1
at
certainly not any
lack of warning from that quarter.
Five million tons of coal.
Why,
-
be for such
make it
to
lion
"For each 5 million tons of coal
correct
major dislocation.v That
period for which we were
jointly responsible. There was the
dent of the Board
a
41
a
at
was
which
of
the
gov¬
boast,
today after
and nearly 20
two years of peace
months of office.
Socialist propa¬
ganda and trade union prejudice
our
reserve
of
coal during
the Army, but still the position was State for the Dominions informed have attained a remarkable result
war?
It is quite inaccurate. The very serious. We took these extra¬ us in another place, only about in Lord Quibell's case. Here was
right hon. and learned Gentleman ordinary measures when the stocks one-third is to be reckoned against a Socialist peer, a former and
The 1 he
domestic
consumer.
two days ago, with a great deal dropped to 10 million tons.
Thu^, much respected colleague of ours,
who- tried
to
consumer
stimulate
of emphasis, lifted up this book present Government, hoWever, whereas the domestic
house
who have been so busy with so was cut
which I hold in my hand, and
by 14,500,000 tons of coal, building by a system of bonuses
builders,
through
the
charged hon. Members that they many important intellectual exer¬ and as his or her—the housewives for the
had
probably never read it or cises, do not seem to have taken come into this—increased Use of number of bricks laid per hour.
although the stocks electricity corresponded' to less The builders liked this system,
would not recognize it.
He took any care,
we
reserve, as
"Digest," distributive stock. ;
must
any
was
corresponding reduc¬
they had ever been in this cen¬ tion at all."
[Official Report
tury;
Surely, then the danger March
10, 1947; Vol. 434, c. 981.]
must have been glaring.
his own "Statistical Digest," or
According to this "Statistical
The National Government had
what he calls his own "Statistical
Digest," of which we share the
taken
extraordinary
measures parentage, in 1938, the last pre¬
Digest," by shaking his head. Our
when our. stacks dropped to 10 war
so-called distributive stocks, par¬
year, the domestic consumers
million tons; it was a very strong
got 45,500,000 tons of coal. In
celled out throughout the whole
which should be kept as a
■
I
out
the Government should have real¬
2-' else they failed to persuade him—
ized what impended. That is the
2 I cannot tell, naturally—but he
but, of course, in the war the fig¬
failed to persuade the Cabinet of ures could not be
time when they should have taken
published. What
r
the calamities which would come the right hon. and learned Gentle¬ steps to meet the otherwise inevi¬
table
catastrophe—a catastrophe
upon us, if we ran short of the
man
has done
is to claim the
few odd millions of marginal coal
which would have happened,
parentage and the credit—if credit
sacred
what is called the dis¬
tributional minimum or, in the
which
(1821)
a
very
of Coal
Shortage
serious thing to run
short of coal in this island when
a
matter of five million tons
save
one's
it.
It
war
can
ruin the whole of
making capacity. What
can
happened after I left office I do
not know. By the winter of 1945
the Socialist Government had only
built up our
our
Why did not the Government do
anything? I ask the' Prime Minis¬
ter to let us know tonight.
We
hot
were
at
war
then:
All
Our
enemies were conquered. The seas
Were'
opened. I am told there 'is
more
tonnage afloat now than
there ever has been, A
little4 or¬
which
The
is
the
last
population
ished.
The
feel the
year.
dimin¬
ordinary people still
cola.
use
fuel
They
have
still
sometimes
dinner.
there
not
be
more
evidently
with
to
Well, we
all
happened to Lord
scheme.
of what
And
;
this
is happening
the country.
is
'
all
>y
National Expenditure
cook
reduc¬
severe
Gentleman
carefully
has
found
much
so
Digest
typical
over
I turn to the
Why, then should iture
this
learned
study
Quibell's
Up went the
rate.
what
to
tion in the supply of coal? I ven¬
ture to think that the right hon.
and
production
know
difference between heat
and
their
prewar
has
and responded to it.
which
than
time
he
to
do,
his hands, this
on
he
ceremoniously to
should
commended
so
the other day.
us
So much for bread and coal.
think I have answered
I
that ques¬
national
of money and
•
.
expend¬
I
manpower.
will mention only a certain num¬
ber of items which might demand
the
attention
Commons.
leaving
their
of
the
House
of
First of all, instead of
the
Germans
affairs
own
to
manage
and-
helping
could, as
Christian men, while stopping re¬
armament, we are spending £120
million a year on trying to solve
their problems when we cannot
them
much
as
as
we
coulcl
solve
our
have avoided both these shortages
them
all
by taking reasonable precautions,
that any other government
only succeeding in teaching them
which has
estine:
tion—that
the
government
and
ever
sat
the benches
on
to
hate
own.
to
us.
in trying to teach
the Nazis and
hate
Then
there
is
Pal¬
£62 million since the So¬
Government
came,
into
dinary forethought and' a little
oppositewould, in the normal cialist
planning, would have made sure
working, of .its affairs, - have had power squandered in Palestine,
that the necessary minimum of
the foresight to take these quite: and ,100,060 Englishmen now kept
stocks in reserve were not la'ckirig.
manageable, measures
in
good away from their homes and work,
I cannot understand' the
answer
to
1 his question'.
Why did the Govern¬
ment not btiy more coal? If they
Could not get it in any other way,
why "did they not buy it? I am
assured
that
bought.
Five million tons would
it
could
have
been
have done it, and more than done
it.
It
or
£9
might have cost £8 million
want
million, but if
it,
again.
it
as
we
We
could
should
did not
we
sold
have
it turned out, and we
not have sold it
it
have, wanted
should
again.
time
and
lead
not
today". /Y :
are
where
us
•
.
we
for the sake of
war
...
with
give
( About Housing
I must say a
ing.
of
I
am
Health
more
sorry
sorry
is
that the Minister
not
here,
for the
Palestine
God
word about hous¬
and still
We are
cause.
glad to know he is improving in
health. We shall all be very glad
the
a
senseless squalid
in order to
Jews
to
the
knows ■' who.
Arabs,
or
k'Scuttle,"
everywhere, is the order of the
day—Egypt, India, Burma.
One
thing at all costs we must pre¬
serve:
the right to get ourselves
world-mocked
over
and
Palestine, at
a
world-hated
cost of
£82
here, in order to million. Then there is all thi3
amounting
almost
to
bring home to him the position in silliness,
which we stand. The destruction lunacy, about the spending of the
to have him back
I must say, I
wrought by the enemy by the American Loan.
bombing of our homes raised the thought it was to be used to rebuilding and repair of our houses equip our factories and plants,
Here are these gentlemen who
to the very first urgency after and to give us the essential food
are
all so clever and eager to
food and fuel.
In
nearly two while we got on our feet again.
make an earthly Paradise, where
years, in spite of all the. regula¬ But apparent1;/ far less than oneall the work does itself, where all
tions, penalties and paper forms, tenlh—I am not going into small¬
we have to do is to soak the rich
er
fractions—was spent on rewe built fewer permanent houses
—if any can be found—and hire
than were built every two months equipment, and all the rest is
more officials for control, if there
under private enterprise and Tory subject to further decision.
are
any unemployed.
They had
government before the war. Re¬
Then there is the story about
forgotten this elementary precau¬ markable.
In
those two years
the dried eggs.
Half the foreign
tion. They were so busy planning
when it was really Operation No
exchange spent on dried eggs last
Utopia, so ardent to score off their
I, fewer permanent houses were year, if devoted to bringing in
party opponents that they forgot
built than were built in the or¬
maize, would have given twice as
their duty, they gave away our
dinary course of affairs, under much real nourishment to the
bread, and forgot our coal, If five
Planning Utopia
million
tons
of /coal
had
been
bought in the last 12 months, in
America or South Africa, it would
not have stopped this hard winter
but, at least, we would have had
the means to
come
through it
without a collapse. It is not a very
good advertisement for Socialist
planning. In fact, a frightful in¬
jury, easily avoidable, has been
inflicted upon the wage-earning
private enterprise and a
government
"before
the
Tory
wa r.
British
have
people,
been
the
and
there
chickens
as
would
well.
[Hon. Members: "What about af¬ But no. The maize must go to
ter the last war?"]
I thought it the delightful people in Yugo¬
was coming.
We shall, no doubt, slavia and Albania, who mur¬
be reminded of Dr. Addison, now dered
44 of
our
sailors a few
Lord Addison, K. G.
We must, no weeks ago.
Indeed, some of it
doubt, be reminded of his fail¬ may have gone to the Poles and
ure after the previous war.
It is Czechs who, I understand, are of¬
quite true that he was a great fering to export eggs and poultry
failure; and he was dismissed by to us. Then there are the Poles
Mr.
Lloyd George, witH lively in this country. I would have had
masses and, the unhappy middle
Labor approbation.
It is no part them all parked out suitably in
class, which will lead to worse
of my duty to defend Lord Addi¬ Germany, far from the Russian
privation in the future. That is
son
today.
But the need of re¬ or Polish lines, within six months
one
of the, justifications for the
housing then, was not compar¬ of the end of the German war.
distributive stock to Amendment which I am moving:
Fortunately for
.ii3.
Consumption of Electric Power
them, industry was changing over
and
had
Before I leave the subject of
not, got fully into its
stride.
The winter was mild, so coal, there is one other fact upon
13 8 million tons.
rl'.V
able with what it is at the present
time,
because
building
was
the
not
so
cessation
of
complete and
prolonged, and millions of houses
It
never
thing
occurred to
else
been done.
.
;
but
that
me
that any¬
would
have
Now they are with us
(Continued on page 42)
j;
,
42
,;Y"' ■■ "!h
FINANCIAL CHRONICLE
THE COMMERCIAL &
(1822)
teaching all these years to the
wage-earning masses is false, or
that the great hopes they encour¬
Failures
The Labor Government's
Thursday, April 3, 1947
the aged and the promises tney made
wonder who was
in time of war, when military
(Continued from page 41)
at the General Election are falssr
views
necessarily
predominate. civil servant who wrote this for
here, eaang, i am toid, m many
his Socialist masters?
Out of the still.
We have weak or absentee Min¬
cases, better rations than we are
2,000,000 we have at present, he Cannot Save
Country With Class
^ allowed to have ourselves.
I am isters in all three Service Depart¬
be
the
last
one
to
be
ments. All three heads have been should
Warfare
sorry for these men; they are
sacked?
What is the meaning of
changed in a. year. There are new
brave men who have defended
One thing appears to me to be
this death-bed confession?
It is
their country's cause.
But pres¬ Ministers now. There is a hew
perfectly clear. The Government
Minister of Defence, if he would the recognition that the life of this
ently the Government will have
cannot save the country and carry
himself entirely in island people of 47 million, can¬
a
bitter
quarrel with them;
a not absorb
I
world.
quarrel which has begun already.
Surely, it would have been wiser,
principle at any rate, to have
180,000 Poles in Germany and
180.000
more
Englishmen
at
home?
Then, of course, we are
told it might have offended Rus¬
sia.
His
Majesty's Government
have been very successful in not
offending Russia.
Perhaps they
in
allow
will
me
offer
to
con¬
my
gratulations on that.
not
important now to reduce redun¬
—
quite apart
dant non-effectives
from
many
issues—when
strategic
of
our
troops
are
so
abroad
and, consequently, affect our lim¬
ited foreign exchange.
There are two great topics with
the present time we have
which I ought, certainly, to deal,
pleasure of being adminis¬
agriculture and finance; but I
tered by 460,000 more civil ser¬
cannot trespass too long upon the
vants—double the size of the pre¬
indulgence of the House.
[Hon.
war
Army—than we had before
Members: "Go on."]
The first of
the war began, at a cost calcuthese topics was dealt with last
culated at £150 million a year.
At
the
The Socialist ideal is to reduce us
to
Scrub-
Wormwood
vast
one
under the So¬
be maintained
politics.
Nevertheless, it is the
cialist system.
It is a confession
duty of the House of Commons to
make
sure
that
strict Parlia¬ that not only have we been deep¬
mentary
and
financial control ly injured by all the Government's
should prevent waste, and over¬ neglects and mismanagement of
charge to the public. It is doubly our ordinary daily affairs, but
my right hon. Friend
Member for Saffron Walden
night
the
by
that
the
Socialist
dream
the
or
wish
not
to
it
nightmare
would
not
numbers of
island
or
—
enable
which
our
you
present
people to inhabit this
maintain
of life to which
standard
the
have hitherto
we
attained.
Why, then, with a sit¬
complex, throw a series
of nationalizing spanners into this
uation
so
indispensable
system,
which
is
the "steady growth of well over a
century"?
at
Why
time when
a
it
do
wantonly
external facts
are
exag¬
gerate it, because it is quite true
that at Wormwood Scrubbs there
v
■
not
to
have
heard
his
quite
un¬
and you induce a general disre¬
performance yesterday.
spect of law; you guillotine legis¬
regard for him, and X
lation in the House of Commons,
also think that 9 Minister of De¬
and
pass
masses
of Orders in
fence should stand a little aloof
Council. You may decree that a
from
party and Parliamentary builder who builds a house with¬
disputes. [Hon Members: "Why?"] out a license is liable to seven
Because he is supposed to run the
years' penal servitude, but you
Services, in which all parties take will find that
juries will not con¬
an
interest
from
one
point of
vict him. You may try to destroy*
view or
another.
Of course,
I
wealth, and find that all you have
doubt whether he ha#s improved
done is to increase poverty.
In
his prestige and authority by the
their class warfare, the Govern¬
exhibition he made of himself last
ment have no right to appeal to
night.
*
-4.
the spirit of Dunkirk.
I ami bound to say, I hope the
I read with interest, and not
Service?'Estimates will
be
ex¬
expected
I
have
a
amined
care.
ing
by the House with great
Quite apart from the fight¬
strengths which have to be
.maintained—which I
degree
of
not
am
guing today—I fear
a
very
non-effective
ar¬
great
padding
has been introduced into all three
Services under
a
petent political
lax
and
control.
incom¬
I
should
like
to know, as the result of a
searching inquiry, whether, for
instance, in the Navy there is not
a
much smaller
afloat
to
men
proportion of
ashore, or of
men
men
afloat to the money we pay, than
has ever been known before.
I
should
on
like
that.
whether
I
in
to
see
should
the
some
like
case
of
figures
to
know
the
Air
Force, there is not an ever-in¬
creasing
ground-staff compared
with those who fly; and in the
case
of the Army, whether the
proportion
of
fighting
men—
which is, after all, the end and
object of military forces—is not
of
program
the
the
between
choose
So¬
a
nationization
They must
time.
same
and
two.
Either
they must go down in a measure¬
less crash with their party flags
nailed stoutly to the mast, and
country down too, or
must make an effort by
will—for which so much of our they
dropping their Socialist legislation,
great prosperity has been sacri¬
by freeing industry and enterprise
ficed, is false and foolish, and that
Socialist
(Mr. R. A. Butler); and we shall
so
adverse, and all the resources
explore, or ask to be allowed to
explore, most thoroughly in the so scarce?
near future,
the very grave sit¬
is only one official to every four
Inefficiency of Government
uation in home-grown foods, and
prisoners, whereas up to the pres¬
Let me put this case in more
future plans
for growing them.
ent we have the advantage of only
As to finance, I shall follow the general terms. In most cases, man¬
one
official to look after every
example of the Chancellor of the agement by private enterprise is
eight wage earners or producers.
not only more efficient, but far
There is nothing like getting the Exchequer, and reserve what I
costly to the wage-earners,
have to say on that dominating less
facts accurately. I am looking at
than management by the huge of¬
the expenditure of the year.
I subject until the Budget, which ficial staffs now
quartered upon
is now not far distant.
hope the Chancellor of the Ex¬
the
producers.
Let every man
chequer will be following this
now
ask himself this:
Is it the
Destroying Free Markets
discussion, for I am sure he can¬
The
French
have
a
saying, interest of the wage-earners to
not be entirely blind to some of
"Drive Nature away, and she will serve an all-powerful employer—
the tendencies which I am indi¬
return at the gallop." Destroy the the State—or to deal with private
cating.
free market,
and you create a employers, who, though more ef¬
We come now to the Minister
black market; you overwhelm the ficient in business, are in a far
of Defence. As I say, I was glad
people with laws and regulations, weaker position as masters? Is it
do
I
bery.
cialist
at
warfare
class
the
on
the
interest
housewife
the
of
to
our
carry
from the trammels in which
have
they
entangled them, and by
re¬
storing, at the earliest date, the
outraged sense of national unity,
to
get out of the troubles in which
are.
That is their choice, and
their only choice.
We have not
we
the
it
control
to
power
The
cision.
on
choice
is
fate depends.
our
their de¬
theirs, but
Whatever
they decide, we shall do our best
to minimize the evils they have
wrought.
We
shall
inculcate
.
obedience to their decrees where-
affect
these
ever
safety
dissociate
we
the
well-being,
or
ourselves
responsibility
for
national
even
though
from
ruin
the
all
now
We
do
do
their
not
Coalition.
a
grudge the
Ministers
offices,
and certainly not
Nevertheless, we must
earnestly hope that the Prime
Minister
and
his principal
col¬
leagues will take the right turn¬
ing
at
this
grave
moment
in
British history. The speech which
the right hon. Gentleman made at
Hanley to win party cheers on
their
cares.
15th
February
was
ominous. 1 It
before officials at public was not up to the level of events,
distribution centres, as Socialism nor was it worthy of the hour. I
logically involves, or to go as a trust that tonight, he will have the
customer to a private shopkeeper, courage to strike a truer note of
whose livelihood depends on giv-, national leadership, and one more
ing good and friendly service to worthy of his wartime record in
queue up
his
customers?
State
must
Of
its
have
course,
the
plan and its
The first object of this
plan should be to liberate and en¬
courage the natural, native ener¬
policy.
genius and
which,
gies,
contrivance of
by a prodigy,
both the
I
heart.
other,
a
wars.
have
two
One
is
hitherto.
convictions* in
that,
somehow
my
"All
been
materials in J
raw
in
all, inventories have
considerably reduced and
better
balanced
the
in
last
few
commitments
are
months.
Buying Policy
"Short-term
the order
of the
chasing agents
mouth'
basis
day.
are on
in
is
the
chasing policy.
ments
One to three
predominant pur¬
Lengthy commit¬
by the lead
dictated
are
time of
our
race,
have
built
up
this
Vast
popula¬
used
to
cumbs."
say
-
late
Lord
"Britain
some
scheduled.
vendors'
production
In line with inventory
policy, forward commitments are
generally made only to protect
current rates of production.
j
Specific
Commodity
Changes
"Many purchasing agents report
offers of scarce commodities by
brokers at excessive
prices. Steel
plywood
are
prominently
Buyers are urged to
resists this speculative influence
on prices by purchasing only from
regular and established sources of
supply.
•>
;
and
mentioned.
"Copper, lead and
led the
Abrasives,
paper
field in price advance.
materials, grain, fats, lubri¬
textiles, cast iron and steel
cants.
are
scrap
all higher.
"Gasoline
may
be scarce and
higher this Summer as stocks are
very
low for this time of
"Caustic
schedules.
-
steady to easing—alu¬
minum sheets and coils improving
in supply. Silver is lower—Poly¬
styrene lower—some pipe deliver¬
ies better.
industrial
"Several
expansion
reported held up be¬
cause of high costs for labor and
material.
One area reports "high
projects
are
housing is now overbuilt.
priced
Employment
"March continued'the February
Fahnesfock in
us
Chicago
Entil Schram teed
Outstanding "Hocsier"
back to the old
named
been
Hoosier of the
the
of Indiana for his
ing attention to
"outstanding
year"-by the Sons
rote "in' direct¬
the need of broad,,
free markets in the
been announced.
nation," it has
Mr. Schram, the
organization said, will receive a
citation
praising
his
,
4
"Lumber
Fisher
do not know all the facts, and it
At the mo¬
associated with Fahnestock & Co.
days of Adam Smith and John
I believe, the teeth are fall¬ Stuart Mill. It carries us back to is foolish to prophesy unless they as
manager of the Chicago office,
are known, and, secondly, because
ing out and the tail is growing the
periods when the laws of sup¬
135 South La Salle Street, it is
h\ ever longer and fatter. Surely, ply and demand Had some valid¬ it is always difficult to strike the
true note between giving a neces¬ announced.
the Chancellor of the Exchequer
ity, and when the qualities of free
and the House of Commons as a
sary warning and spreading de¬
Prominent
in
LaSalle
Street
enterprise, hard work, thrift, con¬
whole should take some interest
spondency and alarm. I do not
business
circles since
trivance, and good housekeeping wish to
1914, Mr.
in this aspect.
emphasize unduly the
were said to be the sources of na¬
Fischer is a former member of the
various
degrees and forms in
; --T suspect, moreover, that the tional wealth.
This paragraph 9
which the crisis will present it¬ governing committee of the Chi¬
military, naval, and the Air Force of the Government White Paper
self to us in the next 12 months.
chiefs,
for
whom
cago
Stock Exchange, a former
I
have
the might have
been conceived by
In the White Paper, the Gov¬
greatest regard, are not sufficient¬ Mr. Gladstone or Mr. Bright.
chairman of the Chicago Associa¬
It
ernment have certainly gone a
ly controlled in these financial as¬ might have been in the clearcut
tion of Stock Exchange Firms and
pects by the present Government. language of Herbert Henry As- •long way in indicating some of
our
principal dangers and have was for several years a partner of
The
control
by Parliamentary quith, in the days when the calm
not shrunk; i from ^confessing that Frazier Jelke & Co. in charge of
Ministers of the Services is more
lamp of Liberal wisdom shed its
than
■
tight—coke
in short supply—electrical heavy
goods still on long delivery
The second is that
,
peace
year.
still
soda
never
Robf. Fischer With
the teeth and the tail.
important in time of
readily
buying
available materials.
months
Many pur¬
a hand-to-
or
shall survive, though for
at
a
lower
level
than
The
•...
upward-trend. Skilled labor is
suc¬ scarce in many sections. Unskilled
things male help is more plentiful, but
tion in our small island, and built are
going to get worse before they female workers are in short sup¬
Before the glowing ply. Some temporary layoffs have
without surprise, paragraph 9 of up a standard of living which, be¬ are better.
fore the war, was the envy of
promises, by which the wearied been made because of car short¬
the White Paper. The House, no
every
country 4n Europe.
The and unthinking people were se¬
ages and railroad embargoes. Less
doubt, has it in mind. The point
first object then, is to liberate duced at
the
General Election, turnover reported—less absenteeethat struck me was this:
these energies; the second stage is have been atoned
for, all of us. lsm. Recent quick settlement of
"Our
methods
of
economic
to guide and aid all the forces wherever we sit, will have much
rubber and petroleum strikes may
planning must have regard to that these native
energies gener¬ to endure. We ere bound to give indicate there will be no big labor
our
special economic conditions. ate into the
right channels.
The the warning while the time re¬ upset this Spring.
Our present industrial system is
Government
have
begun
the mains. It is right to arouse our
the result of well over a century's
Canada
wrong
way
round.
They have people to the peril in which they
steady growth, and is of a very
started with control for control's stand.
"Business is reported at a high
Only when they realize
complex nature.
The decisions sake on the
theory of leveling fully the decline and descent psy¬ level, with tendency to increase.
which determine production are
down to the weakest and least
chological', social, financial and Employment same as last month.
dispersed among thousands of or¬
productive types, and thus they economic, into which we have Prices are higher, with consider¬
ganizations and individuals. The have
cramped and fettered the fallen, and, in part, been thrust, able pressure on the Government
public is accustomed to a wide life-thrust of British
society.
I since our glorious victory, will to accelerate decontrol. Buying
range of choice and quality in
have assembled and cited all these those forces arise in the land in
what it buys. Above all, our na¬
policy generally from one to three
examples of the foolish misdeeds which redemption and recovery
tional existence depends upon im¬
months. Business is very good in
of the Government as an explana¬ can be found.
ports, which means that the goods tion and
Canada."
justification of why we
we export in return must
compete have no confidence in
them, and
with the rest of the world in
why we regard their continuance
price, quality and design, and that in office as a
growing national
our
industry must adapt itself disaster.
rapidly to changes in world mar¬
If I turn to the future, it is only
kets."
CHICAGO, ILL. — Robert J.
for a moment. In considering the
The Leader of the Liberal Party
Emil Schram, President of the
future, one is 011 much less certain Fischer, formerly a partner of
must have been very pleased at
ground, first of all, because we Russell, Brewster & Co., is now New York Stock Exchange, has
getting continually smaller. It is
the old story I have often told of
this. It carries
ment
goods out and
we
time
*'«Vv>v'Yr Y'Y,'
V;':-- '
(Continued from page 4)
is reported due to car shortages,
both
in
movement
of
finished
tion
desire
not
on
ammonia, brass, carbide, construc¬
facing the land.
We
Says Buyers Are
Rand-to- Mouth Basis
refulgent gleam
upon
happier much
of
what
they
hay£
*
been the Chicago officer
"vigorous
campaign to awaken the country
to
the
and
prime need for defending
supporting
built
on
our way
of living
individual initiative," at
the annual dinner of the group pa
April 11.
777
;
■
Vi."
:
v:\
1
"W.
^'-V;'. h
-■
yY'-YY.
if'
C
Number 4582
Volume! 165
(Continued from page 13)
of
to
production
and
Price
k
of
the
the
present
They
economy.
our
policies
and tends to
profit margins
past—and
day—are a threat
recent
the
centuate
ac¬
toward econ¬
trend
In
contraction.
omic
arouse
and
mark-ups
excessive
favors
credit
our
it is likely to result
over-extension of credit,
economy,
in
an
his power of judgment which he
is not prepared to utilize expertly.
Revision
Price and Production Policies Need
typical
panics,
policies.
policies.
production
They have been responThey have been most
| ^ responsible for them but have
least affected
been
by the havoc
to be produced are
course
of
therefore just
economy
our
as
investment.
High profit differen¬
arise from major
technological changes which ren¬
tials
the
prices themselves. Another policy,
namely the level of production em¬
cessions will be granted largely to
,
cycle,
*cess
our long-run sucmeeting these issues.
in
cies
must
be
third
price problems.
^
Export Drive Merely Postpones
The
market-determined
price
generally results from the free in¬
seeking to post¬ terplay of "the demands of buy¬
ers
and sellers where the num¬
pone the day of reckoning by urg¬
ber of buyers and sellers is so
ing huge exports and loans abroad
to sustain volume. This proposal great that such individual policy
decisions cap exercise no more
will not balance national income
than an infinite similar effect."
and expenditures on a permanent
Fewer and fewer prices now be¬
I*basis. Such loans and aid abroad
long to this category. Many fac¬
%tre imperative and our real re¬
tors have contributed to the di¬
sponsibility.
But such a policy
minishing significance of the mar¬
swill only breed its own problems,
ket-determined price, usually as¬
vas we learned in 1929.
We may
sociated with production schedules
7 even sustain large public expen¬
which expand with rising profit
ditures for internal expansion. But
and
contract with losses.
Most
they cannot alone correct a masignificant is the: growing impor¬
r?jor imbalance in our national in- tance of manufactured goods as
J come and expenditure statement
caused by present price and pro- against agricultural products. Sec¬
Many
'
are
duction
ment
aids
as
for
economic
full empioy-
operative if such
the above can be effective.
must
"
The
policies.
essential
trends
*
now
be
7 Organized labor recognizes the
importance of these polithe course of our econ¬
omy.
Its own programs and policies are conditioned by industry's
behavior.
If price and produccritical
"
cies
{f tion
op
programs are
adverse to the
and more industries
large scale capital
investments producing complicat¬
ed and differential products which
reduce the number of active com¬
ondly,
are
more
based
on
petitors in many
business customs
have
minimized
fields. Thirdly,
and conventions
the
number
middle
of the textile
and
American
strata
upper
population.
of the
This is
a
normal
corollary of the previous
policies.
The emphasis on
two
lion-price factors has meant that
manufacturers have stressed qual¬
ity
preferred buyers.
,,"
.,r
Second, High cost producers will the
tend to be sheltered by the domi¬ the
nant interests to avoid price Con¬ the
the
and other similar aspects of
product. They have built up
cost of their
products
so
that
lower income groups are un¬
al
or
trepreneur.
Third,
"
r
-
many
since
manner.
Like most
industry, they have
carved huge profits and made a
financial killing.
They are not
even
being restrained by the
moderate
leaders in
more
their groups.
Nevertheless,
the correction of
these price conditions is already
in sight in these industries.
But
there is little hope, short of the
pressure from a recession and pos¬
sibly increased business sagacity
such as was reflected by the Ford
Manufacturing Co. and the Inter¬
national Harvester Co.ythat more
reasonable prices will be insti¬
tuted by the vast range of indus¬
tries where prices are consciously
to
set
levels of capacity.
are likely
maximize profits
prices
than to assure
an
economy
to
rather
of full
employment. In times of stress
production is likely to be curtailed
cutting prices,
thereby aggravating employment.
in
preference
In the prewar
like the U. S.
Steel
Corp. maintained a 43%
break-even point during the pe¬
riod of 1929-1943; the automobile
be period
to
a
company
industry, 57% for the period 19281934.
American
industry started its
postwar planning with relatively
Benefits of Lower Costs Not Felt
low break-even points in mind.
Finally, and
very
significant This fact is convincingly illus¬
from labor's point of view,
the trated by the replies of some 65
benefits of lower costs resulting industries to the War Production
from
technological
changes
are
likely to percolate freely into
the price structure.
Consumers
are therefore not likely to share
as much in these benefits. If labor
does not secure higher wages, they
redound
to
management exclu¬
less
Such was the experience
twenties and for the most
of
part during the thirties.
The re¬
sults were disastrous.
second policy dominating
significant industries is the
ket-determined prices. Beginning substitution of non-price compe¬
7 to seek protection for its follow-' with the NRA codes soonsored by tition.
Instead of trying to out¬
ing. Wage policies are shaped by
trade-associations,
business has bid each other for public favor
T the workers' experiences in our
promoted the State Fair Trade, through price adjustments, an in¬
p economy, and the results of the and Price Maintenance Acts; the creasing number of industrialists
jr operation of their policies. The Miller Tydings Enabling Act and have chosen to express their ri¬
7 more uneven the course of our the Robinson Patman Act.
Fi¬ valry in a variety of ways unre¬
rj economy, the greater the likeli¬ nally the OPA set ceilings on lated to prices. The emphasis is
hood that unions will concentrate
goods to limit the inflationary on quality, service, performance,
their efforts on protecting workers
or
other
differentiating
possibilities on a shortage econ¬ brand
against economic abuse. Security
characteristics
of
the products.
omy.
then becomes the key to policy.
businesses prefer
this
Since so many prices are now Large
On the other hand,
prices and
of
competition because
consciously influenced in varying method
production policies which advance
degrees by producers, it is impor¬ they enjoy the resources and pres¬
•""•a stable, progressive, full employtant to examine the policies af¬ tige necessary to build by such
■'7 ment economy will always tend to
fecting businessmen and comment means a secure following, fre¬
promote cooperative trade-union
quently at most attractive prices.
on their influence on the develop¬
policies.
Trade union economic
ment of this country.
Foremost Smaller concerns tend to atrophy
policies can be most effective in
and their disappearance does not
among these -policies *s t.^e busi¬
aiding our economy when price
nessmen's aversion to price com¬ tend to stir up public resentment.
and production policies are cor¬
This form of competition has
rect.
It
is
because
trade- petition. Markets, he reasons, are
not captured permanently through become more and more character¬
7 unions
can
only
affect those
price reductions. Businessmen do istic of industry and explains the
by I exhorting
management to not consider price changes as the continuous growth in advertising
make' changes
that the
trademost effective method of broad¬ expenditures.
The development
upiop activities can have only a
ening their individual markets. has great significance for all of
!
secondary influence. They can be
Price cuts lead to retaliation and us.
First, it means, as we have
7 the crimes rather than the man¬
provide no protection of markets. previously indicated, that price
agers of our economy.
The consumer who is attracted by reductions are likely to be re¬
j,rPrice 'policies cannot be conprice cuts is not a fixed customer. tarded even if lower costs are at¬
; gldered by themselves.
Consumer
He is likely ;to transfer his pur¬ tained
by individual producers.
I
costs, are determined not only by
chases to lower priced competi¬ Second, it discourages price flexi¬
7.. the price of goods but also by
tors.
Price wars are costly and bility in response to the ups and
j . the goods from which he can destructive, and feared by pro¬ downs of the market. The auto¬
Select/ If industry is only produc- ducers who maintain heavy cap¬ matic market has largely disap¬
^
highly'• expensive goods with
ital for production. Trade associa¬ peared. Third, it encourages price
manyr,frills and additions, such tions have discouraged price com¬
leadership* patent pools, rigid li¬
as pjur? current
car models and petition. They exalt the stabilized
censing, basing points arid base
dress styles, the economic effect
price even on a regional or na¬ price; systems, which border on
is most depressing.
Such goods
collusion
to
restrain
tional basis; If adj ustments have business
-eliminate various strata of buyers
to be made, businessmen prefer* competition. Fourth, it increases
and absorb an excessive propor¬
and some state laws require, that expenditures on many items which
tion of the national income on a
it be in the form of concessions add little to the article's useful¬
7 limited volume. The quantitiVe
which may assume one of a hun¬ ness. Fifth, it encourages empha¬
demand for-goods is reduced with
dred or more forms other than sis on factors which may be unim¬
national, and the ,worker's best
interest, the trade-union is bound
"
unconscionable
second effect is that busi¬
The
many
Board concerning the volume of
peacetime operations which would
represent capacity production and
the break-even level.
mates
those
actually employed since the
replies were made to determine
the allocation of new equipment
certifications
and
all break-even
52
for
con¬
new
In any event the over¬
struction.
point reported was
% for industries with capacity
behavior during the
ness
thirties.
developments
have
These
our price
production problems. But un¬
fortunately the dominant business
interests have resisted calling at¬
changed
the nature of
and
basic facts.
these
tention to
The
TNEC
hearings and publications
presented the situation. But the;r
significance was lost in the hustle
and bustle of the war
period; the
.relegated to the
findings
were
academic
^helf. Even the profes¬
sors
have done little with them.
Remedial Measures Needed
These esti¬
probably higher than
were
vivid to all of us who recall busi¬
in need of remedial
quite
different
from
those normally discussed if we are
to effect a reorientation of price
;
We
are
measures
and
policies to make
production
them
more
economy
with
consistent
advances
technological
First,
fostered
to facilitte eco¬
production
must
Some
nomic change and the
low
of some $10 billion.
break-even points were as
as
In
the
20%.
1945,
"v
it wras
break-even
estimated that
point for
our
60%. In the recon¬
period the prevalence of
economy was
version
be
an
of full employment.
creation of
opportunities for intensive invest¬
Government aid
ment.
and lead¬
ership in scientific study and com¬
pulsory licensing of patents are
essential.
Savings
will
have
a
and be utilized in
duction encouraged management greater volume. Second, an overto depress break-even points. At rising wage scale can perform two
the present time it is probably functions. It will provide higher J
bottlenecks
which
retarded
pro¬
larger
use
break-even point of buying power, possibly absorb a
capacity. Low points larger proportion of the national f
income and therefore reduce sav- {
by industry have been deliber¬
and
set
up
costs
which {
ately fostered by a desire, in part, ing.
to hedge against future business will invite greater technological
declines. They reflect a lack of changes. Third, price and produc-;
faith in our economic develop¬ tion policies must be frankly open
to
public scrutiny and review.;
ment.
7
They are deliberate and con¬
These four basic business poli¬
sciously formulated; they have
cies have had far-reaching eco¬
definitive effects; they should be
nomic and social effects. Two will
subjected to public examination
be considered. First, they tend to
to appraise their economic effects.
aggravate the usual tendencies to
Are they contributing to full em¬
over-savings in our society. The
ployment at rising living levels?
forces which disturb our economic
operating at
a
below 50% of
Are their break-even points too
are
strengthened.
The
high? Are their production poli¬
inequality in income nor¬ cies restrictive? It would there¬
mally favors large savings as the fore be desirable to provide pub¬
proportion of saved income in our
lic panels where specific price and
country rises progressively with
production policies would be ex¬
income.
The high price margins
amined not from the point of view
established and recurrent large
of monopoly but from the point
balances
basic
profits resulting from the fore¬ of view of their economic effects.:
going business policies accentuate These
panels
should
include
these inequalities and raise our
among others, representatives of
savings out of all proportion to
labor and consumer. Finally, we
the active demand
for capital.
These industries are particularly would urge industry to give at¬
serious threats to a stable econ¬ tention to the idea of price rebates '
omy
our
as
extensive exploitation of
whenever they
national and international re¬
sources
has
become
less
practi¬
New territories; imperial¬
ism; rising birth rates and other
similar
factors
generated
high
cable.?
nary
had
find their
prelimi¬
forecasts of prices and
profits
temporarily petted a higher-
These four
greatly in recon¬
a
consequent reduction
in: the
profit differentials essential to in¬
outright price cuts.
portant in determining the utility
ciling price and production poli¬
standard of living.
Even though
vestment. Now we are forced fun¬
The significance of this trend to the consumer. Sixth, it relies
the dollar volume remains as high
damentally, to intensive domestic cies with the national interest. < n.
on the consumer's credulity,
and
for the moment, such a situation1 away from price competition can¬
7
ness
tries
to adjust production
outrightly drive smaller en¬
terprises out of business. The re¬ Low Capacity Break-Even Points rather than price as demand de¬
sult is to neutralize the competi¬
The fourth policy is the ten¬ clines. The effect is to accelerate
tive
position, and the political dency to fix the break-even points the forces toward recession and
independence, of the smaller en¬ of
This experience is,
production at unusually low depression.
the
prices. Finally,
legislative
developments
1933 have discouraged mar¬
regional
to
not
of sively.
prices; these include among others
"price lines" and uniform nation¬
at present, many areas
competitive prices prevail
exploit shortages in an
tend
against their practices. Public mo¬ they inhibit the rising standard of
industry's rality is less likely to be outraged living; and discourage expansion¬ set.
The
by the semi-monopolist who does ist tendencies in our economy.
Reckoning
•
where
dominating
much of American industry is em¬
phasis on products directed to the
policy
considered jointly,
therefore, in reviewing
True,
v
The
dominant ployed in determining the break¬ flicts. Under such circumstances able to buy them. We have already
economic
groups
have
been even point, is hs vital in fixing the weaker elements in an indus¬ noted that the emphasis of pro¬
J perched securely on top with¬ the ultimate price as the mark¬ try become more obedient to the ducers on these products has seri¬
out subjecting themselves se¬ ups and financial charges which dictates of the powerful, who suf¬ ous efects on our economy. They
verely to self criticism. That is are added tmfhe calculated costs. fer the
continued existence of absorb excessive proportions of
Both price and production poli¬ the weak to
one major reason for feeling pes¬
prevent publication our income on a few commodities;
simistic about
now
.
These
create.
they
must
Seventh,- prices lose their direct
der older processes, products and
First, it means relation to cost. Eighth, producers
industries obsolete. Unfortunately
are likely to seek their answer to
J
that we cannot expect extensive
bad times through production cur¬ business is not aggressively push¬
price reductions.
Producers of
manufactured goods, are reluctant tailment, rather than price adjust¬ ing technological changes at a rate
ment. Ninth, the economy becomes fast enough to scrap industries at
to enter upon such price reduc¬
a scale vast enough to absorb our
tions, except through a general subject to wider fluctuations as
tremendous savings.
As a result,
consent to do so. That is why the corrective price forces are not as
the tendencies toward recession
deliberate
efforts
of
the Ford easily invoked or sought early in
the down swing, of the business are very strong.
■ V'.
V
: n
Manufacturing Co. to secure such
significant in determining the
as
,
not be overlooked.
prevent stability, generate
Moreover, the failure to provide
and ultimately result in
goods for the lower income groups
the
elimination of the equities
restricts the expansionist tenden¬
gained by some in the boom peri¬ cies in our community, and limits reductions on a wholesale scale
ods.
They affect adversely the
from suppliers is so well attuned
the potentalities for large scale,
worker, smaller manufacturer and
and
more
economic, production to the times. Unfortunately this
middle class.
Unfortunately for
company had its knuckles rapped
and new markets.
the r development
of a rational
by the General Motors! Corp. which
price and production program, our Frices and Production Must Be subsequently raised prices.
We
large corporate and financial in¬
cannot expect widespread
auto¬
Jointly Considered
terests have been increasingly in¬
matic downward price adjustments
The policies affecting the goods
sulated from the devastating ef¬
in most industries.
At best con¬
fears,
fects of bad price and
43
THE COMMERCIAL & FINANCIAL CHRONICLE
than-planned
policy.
policies can aid
7
44
THE COMMERCIAL & FINANCIAL CHRONICLE
(1824)
there
up,
Growing Importance of Durable Consumer Goods
the
tween
the
two
There was
wars.
typical growth curve, steep in
early years and tapering off
the industry approached ma¬
the
as
In addition there was the
in national out-
turity.
effect of changes
put
included 4he best
is
latter influence
national product.
the gross
replacements over the next
Less than half of
result of the
using up of the consumer stock
of cars during the war. The bal¬
ance is
split about equally be¬
tween the growth in families and
buying powter which has already
mal
several years.
that demand i* the
the growth curve plus the
changes in gross national product
to be an adequate explan¬
ation pf the number of cars in
# use.
"'V;"
appear
this
in
should
registra¬
formula,
1939
Using
have
been
They were 26.1 mil¬
lions.
In 1940 they should have
been and were 27.4 millions. In
26.3 millions.
1941
they should have been and
were
29.5 millions.
1946
In
they
should
Because
millions.
wanted
been
33
people
many
couldn't
cars
get
them, the actual registrations last
year
only 27.6 millions.
were
Be
tive
would call for
registrations of 38 millions. More
employment
of
half
than
the
increase
over
1941 would be due simply to the
growth in the number of families.
The
balance
would
depend on
the greatly
improved buying
pow¬
of many of those families plus
the more intensive use of auto¬
er
mobiles
business
for
as
well
as
personal use.
In
with
that 38 million
27.6 million
cars
regis¬
tered in 1946,
allowance must be
made for the fact that many of
those cars had been continued in
beyond their normal life be¬
cause of the impossibility of get¬
ting replacements. It is true that
the pre-war trend toward longer
use
life
was
erated
continued
during the
if
not
accel¬
But even
on the
assumption that the av¬
erage life of a car is now about
12
war.
against 10 years in
1941, there were five million cars
years,
as
Still in use in
1946 which would
not have* been in
ments
had
Without
been
those
registrations
than
-
23
last
millions.
if replace¬
available.
use
over-age
year
cars,
were
necessarily
rough but it serves to; indicate
the
magnitude of the deferred
demand boom. Including the nor¬
mal
replacements
five
next
A five-year output averag¬
cars.
ing five to six million per year,
including only passenger cars for
domestic use, is a high figure.
Of course that potential demand
Thus, the
new
in
population plus or minus any
the
in
use
goods.
depend
the degree of satura¬
particular markets.
In
on
of
general, however, this type of an¬
alysis naturally leads to the an¬
ticipation of a deferred demand
followed
the
of
nance
volume
by
in
period
a
prospects for mainte¬
anything like that high
appear
extremely dubi¬
ous.
.
goods as well
many
tive
cars
automo¬
as
mean
that
that
will be sold irrespec¬
level of national
the
of
come
doesn't
It
ture
looks
little
a
less
gloomy.
Looking beyond
that
deferred
demand boom the automobile in¬
dustry
faces
Even if
serious
a
problem.
the total national output
maintained
at
capacity
level, it will take less than 3 mil¬
new
cars
per year to pro¬
vide
replacements
and
normal
growth.
No statistical
low for
a
near
projection
what the
can
automobile
possibility
tained
that, given
incomes
plus
high
availability of
bination
not
sus¬
the
news cars—a com¬
of conditions which
existed
since
has
1929—jalopies
would be scrapped sooner. Never¬
theless 4the burden of proof is
clearly
on
gue for an
those who care to ar¬
indefinite continuation
of
the high -rate of Automobile
production that will be reached
in the next several years.
If
the
available
able
ever
the
of
out
run
to what he would like to
as
buy with the next dollar.
Percentage
ample
on
goods
other
consumer
they
would
were
dur¬
present
on
were
.PERCENT
but
the
electric refrigerator and other ap¬
in
and
other
for
durable
r
Another
reason
con¬
willingness
What the economics,
consumption J function
spend.
the
relatively high.
was
the
was
attitude—his
sumer's
calls
decades.
several
there does
not
significant
that
This reflect¬
later referred
was
on
a
sus¬
period of prosperity—what
to
rather
con¬
temptuously as the "New Era psy¬
chology." The stock market boom
also
encouraged spending even
though in reality consumers could
not add to their
aggregate in¬
come by selling securities to each
other.
:■■■.
,
another
reason
advent of installment
some
World
can
to be
the
was
selling. Peo¬
time
War
Analysis
of
however, does
on the future.
before
durable
the first
goods
counted
for less
than 8%
posable
income
after
that
see
prehension in
time
there
ac¬
of dis¬
taxes.
was
no
Up
clear-
The Depressed
Thirties
Thirties the
of income spent for
durable goods dropped back to
the
ratio
prevailing before the
first World War.
Tne surprising
thing is not that it declined but
In
the
depressed
percentage
tljpt the drop was no greater. The
life span of a
durable good is
rather elastic depending on the
finances of the consumer. Having
pose.
acquired a greatly enhanced in¬
In the immediate postwar years
ventory of those goods he could
the ratio was around 10%. The
afford to postpone replacements
increase might be explained by
temporarily in order to meet other
deferred demands. It was in spite needs out of his depleted income.
cut evidence
that, as the country
became richer, a larger segment
of income was spent for this pur¬
of
the
1921
depression.
1923
through
1929
the
The influences making for a high
rate of outlays in the Twenties
average was over 11%. Since any
deficiency of expenditures during
the
war
already had been made
INCOME
Residential
reversed.
con¬
struction, with all .of its collateral
demands, was at a low ebb. The
unfavor¬
able climate for the development
and marketing of new goods. It
offered
depression
left
well
as
consumers
acutely
nessmen
an
aware
busi¬
as
of future
uncertainties and the need for se¬
curity.as
late
1940 these de¬
as
million
seven
were
unem¬
recovered somewhat but
had
was
of
to
the
ratio
expendi¬
very, low level
the goods were
During the war
tures dropped to a
simply
because
not available.
the
Today the percent¬
current income spent for
durable goods is already close to
age
of
the
previous
even
"higher
In
available.
be
peak.
It would be
if the goods were
fact it is likely to
substantially higher before the
end of this year.
This
demands,
resulting both
deficiency of wartime
outlays and the catching up with
from
the
the growth in population
ing
on
cower.
this
and buy¬
The historical record
chart, however, does
not
support the possibility of any such
ultimate
as
1
contrib¬
can
But
if
income
could
be
main¬
tained, in spite of the running out
of
the
most
pressing demands/;
there
would- be
such
no
drop
in
total expenditures as is suggested;
by
analysis of the automobile
Outlays for automobiles,/
other item, may drop bu£"
market.
any
.-
of
was
running out of demand
indicated
by the analysis
the. automobile
market.
1939
income
t
not
are
saturated.
Unfortunately none of. us has
the imagination to visualize at all
declined
or
<
clearly the potential markets for
durable
goods which could be ■'
opened up by a sustained period-\
of prosperity.
Any attempt to anwhich
developments,
which new products will be im¬
portant five year from now is
likely to be wrong oftener than \
it is right.
ticipate
.
Forty-five per cent of the durgoods outlays in the twelve
>
able
of
ume
Ex¬
because
the
home
new
building over Depending on
prefabrication,/
the next few years.
the
evolution of
other
or
better
of
means
house for
activity
tance
"producing
less
a
this ?
impor- :?
money,
could exceed ' in
duration the housing £
and
boom of the Twenties.
Fifteen
percent
for
were
of
the
recreation
-
equipment.
The
outlays
and
trend
sports
toward
leisure time, as well as a '
higher standard of living, should
expand these markets.
mere
A
comparatively small part of
was for
primarily labor- ■'
saving devices such as clothes
washers, dish washers and ironers.
Many of these markets are far
t
the total
from saturated.
The scarcity and :
high cost of domestic service puts
a
premium
such devices.
on
■.,//■
In part the potential is in terms
of new products and new markets
rather than just more of the same '
things that
produced before
were
Here any predictions be- •<
war.
come
particularly dangerous. The *
possibilities can, only be illus-
trated.
The
eration
market
will
for
refrig¬
supplemented by
be
y
the market for home freezers. The
radio industry can look forward
to
television,
In
r
/
;
;
brief, the chart involved the '■
reasoning'so familiar
to
business analysts.
The potential
national output is roughly double
the: 1923 to 1929 average. Out of
that output consumers can afford
to
buy at least twice
as many
dur¬
able
goods. Looking beyond the
catching up period, this means a
vastly increased consumer inven¬
tory of such goods, providing a
higher
standard
of. living,
more
comforts and convenience^.
But
the
durable
market
for
of
business.
the
ture
For
there
is
not
the
volume
immediate
much
about that market.
/
are
produced.
deferred
taking all that
Ultimately,
of
fu¬
question
The
demands and accumulated
power
:
consumer
goods! is also, {one of the
determinants
buying
can
be
however,
there will be the problem of main¬
taining
a
high level of consump¬
tion when the
are
penditures have declined because
a
is'
ute to a decline in income.
high ratio reflects accumu¬
lated
.
-
the'
the ratio of expenditure to income
but because small changes in the
circular
Twenties.
NATIONAL BUREAU OF ECONOMIC RESEARCH.
are
be easier for
significant not because of the pos- v!
sibility of any major change in '
'
^ SOURCE; U. S. DEPARTMENT OF COMMERCE,
pressing wants
it will
to save. He will be
little less eager to spend. This
the
back
not
1934
most
consumer
the
;
./
ployed. The real income per fam¬
ily was still below 1929. The per¬
centage^ spent for durable goods
1929
r
years
before the war were for
house furnishings and equipment.I
All the signs point to a large vol- I
quarters.
some
any
There
1924
deferred
aggregate outlays would not de- ;
cline so drastically.
There will f
always be other wants which are
not satisfied, other markets which
tained
Even
1919/
of
ture—confidence based
percent¬
incomes
As you
appear
experience,
some light
For
the
PERCENT
1914
out
no
or
trend.
throw
to
his
satisfied
part they were net addi¬
tions. /.
to
goods
pression influences were still felt.
1909
that the ul¬
mean
running
In part these were sub¬ consumption function
pliances.
stitutes
Goods
shows
CONSUMER EXPENDITURES FOR DURABLE GOODS
AS PERCENT OF DISPOSABLE
the' automobile,
also the radio,
was
Still
Spending
of
chart
From
data
the devel¬
was
opment of new durable goods
which competed for the consum¬
The outstanding ex¬
er's dollar.
were
necessary
As
reason
ple who did not have the price
of a durable good paid for it as
they used it. This making it easier
age
of
their
current
to buy was more important than
which consumers have spent for the
resulting mortgaging of future
durable goods over a period of income which caused so much
ap¬
The
al¬
in¬
dustry may be able to do to ex¬
pand its market.
There is also
the
has
consumer
ideas
that
evidence
no
Durable
price.
is
is
in¬
and output or irrespective of
timate
-
ed consumer confidence in the fu¬
There is another point of view
which the longer-term fu¬
from
There
biles.
Another
there
would
conclusions
part
tion
decline
or
lated to the accumulated needs for
a
the high level
was
Jones."
the
with
demand
replacement
in part on the mainte¬
high level of productive
employment—which in turn is re¬
of
nance
reason
demand
Fortunately the market for dur¬
able goods in general offers a
more
promising future than the
market
for
particular
goods.
depends
-■■vv'
This does not
One
had
wants
consumer
demands is of
varying with the life span of the
item. There would be the growth
boom
is around 25 to 30 million
years
all
been satisfied.
11%.
There would be
There would be the
war.
normal
2%
which
the poten¬
about
of
million cars per year,
tial demand over the
less
production necessary to reach the
fore the
in
lion
comparing
the
is
because
result¬ of, residential construction. New
consequence. As
houses call for new' furniture, in the Twenties and again in the
make normal replacements during furnishings and equipment. Mov¬ Thirties, the attitude of the con';
the war and in part from the de¬ ing into a new neighborhood is sumer will be one of the variables
sire and ability of consumers to likely to renew the competitive determining
how
well
national
own
more
than they could be¬ process known as
"keeping up output and income are maintained.
of
backlog
The
Enormous
the
ing in part from the inability to
increase
estimate
The
other
By 1952 a high level of produc¬
the
Deferred Demand Boom to
ever,
v/ho
the
over
similar pictures.
of these
After 1929 there
was
a
similar lag on the down
side. Over the whole period, how¬
tions
growth
potential
next five years.
rapid increase in gross
the
national product.
-
and the fur¬
since 1941
occurred
ther
registrations lagged be¬
In 1923
hind
meas¬
the
of
ure
business
Since
income.
or
cars var^
by 1952 is about 15
million, over and above the nor¬
million
38
(Continued from page 4)
have been other
jump from 8 to
must
for
reasons
Thursday, April 3, 1947
satisfied.
more
"
Analysis of the
of
consumer
obvious needs
,7
and control
use
credit
.
should
goods were not available but not against that background.
be
Volume 165
■
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4582
Problems in 1947
(Continued from
(1825)
industries, plus the coal and mari¬
time strikes. In nearly all of the
which
post V-J Day strikes demands for
which
new
or
page
8)
activities, the
L.
bargaining was
and in
but little col¬
when the war came
there
was
lective bargaining during the war.
That serious trouble developed
additional restrictions upon em¬ legislation or the great wisdom wage increases were the primary
ployers. All actions premised upon of the National War Labor Board. issue. Union security figured as
.closed
shop
agreements It is to be attributed to the "No- an issue (even as a minor one)
tablishment
or
maintenance
of illegal
in less than 5% of all the strikes,
have been against employers. This Strike Pledge," and
its faithful
company dominated unions,
and
has been true also of the great observance by the great majority compared with above 50% in the
refusal
to
bargain
collectively
when a majority of the employes majority
of cases in which a of union leaders and manage¬ prewar years. Of the 4,700 strikes
in 1946,' only 19 are recorded as
have designated a collective bar¬ breach on a union agreement has ments. The No-Strike Pledge was
State experience a very informal promise of the jurisdictional strikes. In very few
gaining representative. Commis¬ been charged.
leaders
to, avoid
strikes of them was there even a claim
sion of an unfair labor practice— indicates that labor legislation of labor
membership
collective
45
es¬
in
these
industries plight
almost
natural.
be said to have been
Recent Strike Trend Downward
The
best
part
of
the
postwar
strikes
record is that the trend of
has been downward now for more
The serious than a year. During the last three
the restrictive type is more of an while the war was in progress of contract violation.
employer does not; consti*
strikes of the postwar period have months strikes have been at a
crime nor does it subject insult than an injury to organized and a corollary promise of both
However faulty the
But just as the employers management and labor to abide developed after contracts expired low point.
him to suit, at law.
But it does labor.
and have concerned disagreements government's
handling
of this
make him
liable to proceedings resented having the Wagner Act by decisions of the War Labor
over wage rates,;;
problem may have b~en in the
before the National Labor Rela¬ forced upon them, so the union Board on issues which the parties
Each side insists that the other first period following V-J Day, it
tions Board and, if found guilty workers, have felt aggrieved by were unable to settle. The Nohas become much more sure ana
of unfair labor practices to an the restrictive state laws. These Strike Pledge was not kept l00% was to blame for these strikes
It was, however, Very probably, the old adage, that consistent in the most recent pe¬
order directing him to desist from laws may to some degree have on either side.
riod. The government's course of
<these practices and to make whole, checked the spread of union or¬ observed remarkably well on both it takes two to make a quarrel is
but,
unfortunately, sides.
Typically, labors felt ag¬ closer to the truth in most cases action in the railroad strike of
as nearly as
can be, the persons ganization
last Spring and the coal strike of
Injured by his unlawful conduct. they have not brought labor peace. grieved because the Board refused than to exclusively blame either:
last Fall could scarcely have been
IBut it is only after such an order In nearly every state which has to allow as large wage increases A small number of strikes may
been due to
Communists improved upon for vigor and ef¬
Ihas been confirmed by a Circuit a restrictive labor, law the gover¬ as it felt entitled to and as it have
fectiveness.
These
potentially
Court' of Appeals that- the em¬ nors in their messages of this year could have gotten but for the ex¬ within the unions, as the; party
have dealt" upon the need for fur-? istence of wage controls. On the line changed when Russia was nc most serious strikes were settled
ployer is subject to any penalty
without any real damage to our
for disregard of the Board's orderl ther restrictions, while most of other side; many managements longer in danger. A much more
the governors in states without felt aggrieved because the Board potent cause was; the belief : ol economy and without any yielding
The National. Labor Relations
such, .laws rreported > that
their Often settled / disputes over de¬ many workers that wages; had to the strikers. But the principal
Act became law in July; 1935;but
states
had been .relatively free mands .for the closed shop by been kept down unduly during credit: for -the greatly improved
if did not really become operative
strike picture belongs to the man¬
from labor troubles.
directing union maintenance of the war and that profits were so
until April, 1937,-when the Sut
agements and to the unions which
I iSinc'e^^he peric$^frbhr^937 to membership during the life of the high that very substantial .'In¬
-preme
Court unanimously held
have, worked
out
compromise
contract.
With
few
exceptions creases' could easily be granted:
its provisions to;he ^bnstitutionall 1941, of-the • greatest .spread; of
both sides abided by the Board's Even more important in ihkKConl settlements without strikes of the
In4 another case decided at the unionise* and of;union excesses
troublesome
second-round wage
which; turned, p ub 1 i c opinion decisions. Thanks to the patriots nection ;was the steady: upward
same time a majority of 'the Court
increase
demands, v When
these
ism displayed by them, we got Climb in the cost of living. ~On
a gainst the unions, we have been
held ithat the Act applied hot only
demands were first presented they
through n the trying war periocj part of management there was an
to what had theretofore been con- through the trying but glorious
seemed likely to produce another
with a minimum of interruption understandable, but unfortunate
wave
of strikes
sidered; mtetstate commerce, but days of World War II and the dis¬ of war
comparable to
production through strikes. hesitancy to promptly grant rea¬
to all industries, other than agri¬ turbing experience since V-J Day,
that which followed the presenta¬
Wartime
restraints,
however, sonable wage increases, that were
During World War II this eoun?
culture, in Which interruption bji
tion of the first-round wage in¬
were productive
of# much discon-r clearly called for. There was also crease demands. But in industry
a labor dispute would in. a
sub-f try r had relatively /little - labor
a feeling that the time was oppor¬
trouble. : In the nearly four years tent andl produced, many frictions!
stantial
manner
interfere
with
after industry compromises have'
which were an important factor iri tune for a showdown with thd
interstate commerce. These decU of.our* participation in the war]
been ..worked
out, representing'
to; regain management
bringing cn the serious strikes) unions,
sioris were' rendered f)3r the Su4 our direct; strike losses, totalecj
Which plagued this country dur¬ rights lost during the war. Both settlements, without strikes, which
only 36,000,000 man days•—consid-are
' eminently ; reasonable * and
preme. Court before a single ap¬
ing the first ten months following Sides had asked for the restora¬
pointee of President Roosevelt sat erably less than one half of 1%
fair to both /sidesV:: Through thisi.
Almost as soon ■ as the tion- of free collective bargaining5
of working time in industrial em¬ V-J Day,
on that
But to many. un ion: leaders that process, it has been possible to
ployments. This, was not only a shooting stopped and, at the in-i
1
make adjustments to the peculiar
These decisions upholding the
much smaller strike loss than in sistence of both labor and man-* meant, "Give us what we want, or
situation presented in particular
'Wagner Act and giving it the the
agement, the government returned else." And to many managements
prewar years, but relative to
broadest possible scope were fol¬
plants, avoiding the unfairness of
our number of workers, the small¬
responsibility for the settlemeh^ it meant the right to say "no," the
18V2 cents per hour-increase,;
lowed immediately by the great¬
without possibility of review by
est
wartime strike loss in any of labor disputes to the parties
across the board and in all plants,
est wave of union organization we
English-speaking country.
Many directly involved. After Aug. 18; anyone. This may have been free which
finally became the pattern
have ever known in this country:
collective bargaining, but clearly
strikes
occurred
in
the United 1945, the War Labor Board merely
of the first-round wage increases.
Since 1937, union membership has
was not genuine collective bar¬
States during the war years.
In cleaned up its old cases and it
increased from less than 5,000,000
Unfortunately, not all industries
gaining.
' " ;
1944, there were more strikes than went out of existence on Dec. 31;
to nearly 15,00.0,000.
to date have worked
out such
The great in
1945. Wage control was withdrawn
any other year, including even
mass production * industries were
reasonable
compromise
settle-,
Responsibility for Strikes
1946.
But with few exceptions,* except where price increases were
merits. In the great mass produc¬
largely organized at this time. In these were "wildcat" strikes in-' sought simultaneously. Labor and
Responsibility for the strikes
these industries, however, there
tion industries of rubber, auto¬
volving few men and, typically, management were strictly on their after V-J Day must be shared by
was but a short experience with
mobiles, and steel there is still
they were settled within a few own and* it was hoped, that they the government and the public.
collective bargaining when the
a serious
possibility of bad strikes
settle
their
differences The
days. Not a single strike occurred would
government's policies were
war came and interrupted normal
ere many months. The same holds
during the war which was author¬ through collective bargaining.
uncertain and frequently changed*
true for the railroads, the tele¬
'developments.
ized
by an international unionWe had no less than three radfc
phone industry, and, as always;
then
Strikes in Mass Production
affiliated
with either the
cally differing wage policies in coal.. When in the steel industry,
Unions Lose Public Favor
AFL or the CIO. Independent un¬
Industries
the first six monhts following the
on
expiration of the contracts in
During this period, while union ions had a. somewhat less
good
close of the war. Largely drop¬
In many industries they did so,
-membership
and
union ' agree¬
January, it was extended by mu¬
record* nbut only the coal strikes
ping wage controls while retain¬ tual agreement until .the end of
ments multiplied, the unions lost
without strikes. * But in the mass
resulted in any serious interfer¬
ing price controls was most il¬
favor with: public opinion;
April, to allow further time for
production industries as well as
For ence with war
production.
logical. The press, by giving undue
other establishments where un¬
negotiations, this was generally
this,
their
own
conduct
was
publicity to strikes, tended to pro¬
Contrary to a wide-spread im¬ ionism
was
new ; very
regarded
as
an
assurance
that
serious
largely to blame, although by no
pression now prevailing, strikes strikes developed. From V-J Day duce a situation in which we al¬ there will be no steel strike this
means
all unions were respon¬
were
not prohibited by any law
ways seemed to be in a crisis. As
This was the time of the
sible.
year.
Similar action in relation
through
February,
194-3, strike
was said
at the time by a keen
.sit-down strikes and of the at¬ during the War. Nor did we have losses increased every month. In
to
the
Chrysler
contract
was
arbitration, as this February they were at a peak of observer: "We could make some viewed as an indication that there
tainment of control by Commu¬ compulsory
term is usually understood.
The 23,000,009 man days—nearly 4% progress toward better labor re¬ will be no automobile strike. To
nists in a fairly large number of
National War Labor Board was
lations, if somebody was not al¬
CIO international unions and of
of working time and three times
date, however, no compromises
ways
saying that we are in a have been
vested with authority to decide
more local unions.
In the intense
as
agreed to in either the
great a loss as in the entire
issues in disputes which manage¬
crisis, alarming the public and steel or automobile industries and
year of 1944, the worst year we
organizational drives of the rival
magnifying differences." Public the rubber workers are due to
ment
and labor did not them¬ have ever had for number of
federations into which the labor
selves
settle.
But
its decisions
movement had been split, public
strikes.
Since February a year opinion, because hysterical, unin¬ go on strike within a few days
formed; and partisan, was a far
were merely advisory, with plant
interests
were
against the four major rubber
disregarded and
ago the trend of strike losses has
less effective force for industrial
seizure as the only possible method
been downward. It remained very
companies, unless there is a last
public opinion ilaunted.
of enforcement when the Board's
peace than it could and ought to minute settlement. Such last min¬
Labor paid dearly for this mis¬
high for three more months. Since
have been.
orders were not voluntarily ac¬
ute
settlements are exceedingly
take. Labor excesses were an im¬
early June, 1946 the total of the
There is little in the record of common in labor disputes and the
portant factor in bringing on the cepted. Plant seizures were re¬ strike losses has not been so very
sorted to in but few cases and
the
postwar labor troubles of situation is by no means hopeless.
conservative
wing in American
alarming. Since then we have had
sometimes .failed to bring about
which any one can be proud. But The fact that these are the in¬
politics which has been very pro¬
only two nation-wide strikes, the
compliance. But the great major¬ maritime strikes of September and no good can be served in harping dustries in which occurred the
nounced since 1938.
One of its
major consequences has been the ity of the Board's decisions were October and the second coal strike upon past shortcomings. With all greatest of the strikes after V-J
enactment in many states, begin- accepted in good faith by both of John L. Lewis in November. of the bad strikes we had in 1946, Day, however, is.not reassuring.
sides, although they often did not
it was nevertheless the year of Similarly, it must be deemed a
> ning- in .19.39,
of a new type of
Only in two months of this period
like them. In 21,000 labor disputes was the strike loss as
labor legislation,
great as the greatest peacetime production cause of concern that to date the
restrictive of
cases
decided by the War Labor
we have ever known. The 113,000,labor unions and their activities
employers in steel and automo¬
5,000,000 man days, contrasted
Board, there was defiance by un¬
in labor : disputes.
with above 10,000,000 in each of 000 man-days lost through strikes biles are reported not to have
At the same
ions in less than 50 cases and by
time:there:has been an all but
the first five months of 1946. Dur¬ in this worst year represented made any counter wage offers. If
employers in less than 300 cases*
complete cessation of new labor
ing the last three months, strike only 1 Vz % of all working time settlements are effected in the
the great majority of the latter
losses have been less than in nor¬ and less than half of the loss es¬ critical industries mentioned, 1947
legislation of the protective type,
after V-J Day.
More important mal
timated by the National Safety
which until recently was the only
may well prove one of the best
prewar years.
;
was the fact that even in war time
Considering the entire year of Council as the cost of industrial years we have ever had. But the
legislation, to: which the term "la¬
the great majority of employers
bor legislation" was applied. The
1946, the strike record was by far accidents in this year. The 4,700 danger of bad strikes in these in¬
and unions settled their own dif¬
restrictive: laws in the states have
the worst of any year.
Direct strikes during 1936 are to be com¬ dustries is still very real.
by
an
tute
a
,
.
-
,
*
>
.
.
.
,
'
-
•
-
-
,
been
state
very
little enforced.
than
other
In
Wisconsin
no
was
there up to last Summer even a
single
case
in which
a
union has
been proceeded against for
labor
there
.
practices.
have
been
In
unfair
Wisconsin
many
cases
against labor unions under its
Employment Peace Act, but even
there
of
the provisions
designed to hit unions
many
which were
have in practice turned out to be
ficulties v/ithout resort to the gov¬
ernment.
As was to be expected
total of above 50,000
New Legislation Questionable
in effect in
There were
What Congress does or does not
gaining | was so new in these in¬ There were fewer strikes in this ten agreements reached without
do will have very little influence
dustries, this was less true in the
strikes for every strike. Many im¬
year
than in 1945 or several
upon the chances of avoiding this
mass
production industries than earlier
years.
But the strikes of portant industries have had lew, danger. The leng time effects of
in most other industries.
anv,
strikes since V-J Day.
1946 involved more workers and if
many of the proposals now under
lasted longer.
29 strikes each of Among them are building con¬
from the fact that collective bar¬
No Strike
The
lime,
very
strike
which
Pledge
record
was
good, was
on
not
pared with
bined total of the four war years.
the
which
during war
the whole
due
stride losses totaled 113,000,000
man-days—three times the com¬
to
any
involved more thamlO.OOO
workers
of
the
accounted for. above 75%
strike
loss.
(These
nearly all in the mass
were
production
union
a
agreements
United
struction, ;
States.
textiles,
men's
*,
and
clothing, rubber, paper,
and shoes.
The postwar strikes
occurred mainly .cin industries in
women's
consideration in the Congress are
debatable.
them
V
-
but
about
have
page 46) '
I have omnions
not claim to
do
(Continued on
46
THE COMMERCIAL & FINANCIAL CHRONICLE
(1826)'
Labor Management Problems in 1947
(Continued from page 45)
the
in
answers.
the
That
,,
changes
legislation may
some
present
have value in the development of
improved labor relations, I read¬
ily concede. To make the obliga¬
tions of the National Labor Rela¬
tions
Act
two-sided, instead of
one-sided, is clearly desirable. So
is the writing into the law of the
employers'
freedom
of
speech
which is guaranteed by the con¬
stitution. Opposition of the unions
to requirements to insure the hon¬
est handling of union funds and
of democratic procedures within
unions, I have long regarded as
short-sighted and most unwise.
Jurisdictional disputes are so un¬
fair to employers that I favor exr
perimentation with governmental
machinery for their settlement. If
the power of seizure in labor dist
putes which threaten our entire
economy can be safeguarded so
as to prevent the serious threat
to the continuance of our
of
free
enterprise
system
which
such
national
stroy unions, they
;
certain to
are
bring to the top the rabble
and
the
most
extreme
rousers
elements
Giving
bargaining involves among the union men.
reviewed with suspicion.
That is more thap negotiation or even the status and security to the union is
not a guarantee of no further la¬
why I have said nothing about conclusion of union agreements.
bor trouble but a sine qua non in
Federal legislation against acts of It involves the
parties learning
violence and such clearly unlaw¬ to live
together and making ad¬ getting along with union.
On the part of labor, a first es¬
ful conduct as mass picketing. justments to their mutual advan¬
government
should
be
Such conduct is unlawful in every
state
and
I
believe that
we
can
Collective
This is something that the
government cannot do for them
tage.
sential is to convince management
the next few months.
given the President.
It
act
whether
is very
Congress
will
these
by the time many of
disputes : reach the critical stage.
Even more important is the fact
that the legislation Congress is
likely to pass is concerned with
other
fellow
acts
unreasonably,
look inward.," But the inward look
must be
more
than
a
look of self
m& M
that they are the under-*
dogs and that the law is unfair to
them. There is dangpr,^ however,
spread
been
few
strikes,
Both
labor ;hnd
management
will not
lessen the danger of strikes in the
prohibition of in¬
dustry-wide bargaining comes not
from industries which, are- now
ments in interstate
needs to be
commerce
changed.
al
t
<
Government cfe make an
portant contribution to the
provement
of
im
im
collective
bargain
available to th
ing by making
parties the latest
relevant
date
arbitration—and I
the
note
here tha
Advisory Labor-Managemen
Committee has extended deserve
praise for recent improvements i
the
organization and functionin
the United States Conciliatio
Service. The government also ha
of
the
responsibility for maintainin
lav/ and order in strikes, which
our
governmental
executive
duty
system
is
and
primarily
state function. When
great emer
gencies
arise the
government,
a
I have
such
suggested, must go beyon
measures and,
through th
exercise
with
of
all
its
and
powers
the support of
public opin
ion, end strikes which are real!
serious
menace
to
our
entir
economy.
such an inward look of
labbj^and manage*
onot; merely
humility, there is needed for im¬ mentj therp
provement in labor relations, a free, but genuin^ ^collective bar¬
near future in the
rubber, steel, sympathetic
gaining—an attitude of tolerance
understanding of the
field. Some new legislation may automobile, and telephone indus¬
and understand im&4n earnest de*
problems
of
the
other
fellow,
be helpful to get employers over tries in which, the closed shop is
There is today and has long been sire to make collective bargaining
almost unknown.
the feeling which is now so wide-*
Similarly, the a wide
gap between the thinking work,. a willingpefca to explore
demand' for the
have
clearly the present standar
of 40 cents per hour in employ
a
.
Caution Against Extremists
righteousness. Rather it needs to need to cease
taking the advice of
be, as Charles Luckman has said, the extremists in their ranks. It
subject, I favor strengthening of
a
the Conciliation Service and be¬
look
of
"humility" without just does not make.sense to follow
which "there is no hope that ei¬ the
lieve that, instead of the reduced
leadership J/of industrialists
appropriations proposed by the issues and matters other than ther side will bring to the bar¬ who have made 3. mess of their
House Committee, appropriations those involved in the pending dis¬ gaining table those qualities of
labor-relations fed to reject the
for this purpose should
The issues in these dis¬ sanity, moderation, and tolerance advice of other
be in¬ putes.
industrialists who
creased; There is still other addiT putes
center around wage de¬ which are indispensable for the
get along well Vwith unions. On
tional legislation which has some mands, not the closed shop, in¬ survival of democracy in indus¬ the
part of uniojhfeit is high time
promise of being helpful.
dustry-wide bargaining, jurisdic¬ try."
that they
realize; that responsibil¬
tional disputes, or the unionization
My general view, however, is
ity goes with power£ Unions must
Sympathetic Understanding of
that satisfactory labor. relations of foremen. Prohibiting the closed
recognize that JheyX have grown
Parties
eannot be developed by law. I do shop in the industries in which it
up and act accordingly.
On the
not see the solution of our labor now exists, in most of which there
part of- both
Besides
difficulties in politics and have no
faith in increased; governmental
restrictions and authority in this
Fair Labor Standards Ac
but
and the public
get effective law enforcement only —something which
opinion insists upon local most, can encourage
and
life.
Unions cannot expect man¬
state
officials doing their never accomplish.
sworn
duty, to impartially and
Developing genuine collective agement to deal "• other than in a
vigorously enforce the law during bargaining in industries in which spirit of hostility with them, so
labor disputes, as well as at other it has not
.heretofore prevailed is long as their leaders and their
times.
not an easy matter. Management, publications are constantly villiunaccustomed to dealing with un¬ fying management and stirring up
Prospects of Industrial Peace
ions, will .be alarmed about en¬ grievances and magnifying them.
The prosperity of the workers is
But all this represents some¬ croachments
upon
management
thing of a departure from the rights. Union leaders who have dependent upon the prosperity of
principal subject I am discussing, thought and talked of manage¬ the company, even though large
the prospects for industrial peace ment as if it had horns will find profits are not a certain guarantee
in 1947.
Whatever may be the it difficult to reverse themselves. of high wages.! And the rights of
long time effects of what Congress
Outsiders can only make sug¬ workers as human beings, democ¬
may do by way of additional labor gestions which labor and manage¬ racy in the shOp,%an be attained
and safeguarded Without destroy¬
relations legislation,
it is quite ment, earnestly seeking to get
clear that it can have only indi¬ along with each
other, may find ing the rights of management and
its abilty to successfully conduct
rect
effects
upon
the
disputes helpful. One such suggestion is
which may result in strikes within the old French saying: "When the the enterprise.
?•
doubtful
to the
that the, unions are It can do much toward the peace
not revolutionary and do not seek ful settlement of
labor dispute
law, at the
to destroy the American way of
by way of impartial mediation an
but of itself
if public
power carries with it, authority to
that effect may appropriately be
Like every^
body else who has spoken on the
Thursday, April 3, 194
This program
assigns
a very
portant role to government in
lation
to
'V;
im
re¬
labor
disputes.
But it
leaves the major responsibility,
where it should be, upon labor and
management.. Governmental de¬
termination
of
labor
problems
represents
from
relations
American
departure
a
ideal of self
government in industry. In some
situations it is necessary, but all
our
of us,
I feel sure, much prefer
adjustment
through the demo¬
cratic processes of collective bar¬
gaining.
'
y
,
.
w
Collective
.
bargaining • has
worked reasonably well in many
industries even during the^eariy
months
of
the postwar period,
.
.
when there were $0 many great
strikes.
It v. did not function to
other industries, but in most; of
these industries there had" been
~
possibilities for [adjustment with
an
open mind fed to make ac¬
fortunately,
ciation of the fact that there is commodations e|feling 1 the .other little experience with the institu^
that this feeling may be shifted bargaining on thabbasis but from
such a pronounced difference in fellow^,to liveand function in ac¬ tiom .We eannot be sure that/there
to the workers, with the inevitable industries which have never had
basic patterns of thought. Many cordance with the -basic concents industries „wil| be able to make
consequence
that there t will be industry-wide bargaining and in
managements do not understand of our* Americanvtiemoeracy and collective bargaining work in t)>e
which it is not now a major issue.
a'
drive
ere
long for
further
unions and all too often do not of our Americari-system of free public interest as it has in so
restrictions
upon
management,
many other industries.. But I see
Conversely, J also do not believe try to understand them. On the enterprise.
'
which will reach fruition on the that what- C-ongress •
no
cause
for despair.
I believe
may- do by part of the many unions and their
next swing of the political
that if left alone, labor and man¬
Responsibilities of Public as
pen^ way of additional labor relations leaders there is
very inadequate
dulum.
Even as now proposed, legislation; will have the effect of
agement in these industries will
Neutrals
appreciation of the problems fac¬
many of the restrictions intended bringing ^ on: another'strike
While expressing my views on be-able to solve their own prob¬
wavef ing management and all too often
to
as some of the
operate
against unions
are
lems, with the minimum of gov¬
opponents of this indifference as to how union poli¬ what labor and
management can
likely to prove further restric-. legislation are predicting. Should cies
ernmental
intervention
we
all
may affect the survival of a do to improve labor relations, I
tions
the downward tiend of strikes be
desire.
upfe the freedom of action
do not want to overlook the re¬
company or industry.
of managements. The final net reversed after Congress
acts, it is
It is false, as asserted
by the sponsibility of those of us who
result of reliance upon legislation inevitable that the proponents and
Communists, that the interests of are neutrals. We have talked a
to solve labor problems
supporters of the legislation will
may welt
lot about the rights of the public,
labor and capital are
completely
be, as Cyrus Ching of the United be charged with this result. But
antagonistic and irreconcilable. It but very little about the duties of
States Rubber Company has often even in that event, the true
causes
the public. But in our legal sys¬
is also false, as often stated
by
warned, that both labor and man-t of the strikes are likely to be
management partisans, that the tem, every right/carries with it
CHICAGO, ILL. — After four
agement will be bound hand and much more deep seated than
any interest of
the workers, the stock¬ a corresponding duty and that ap¬ years in the Army and the De¬
foot and that the government will legislation that Congress
may pass.
holders, and management are in plies to the public as well as to partment of State in Washington.
dictate all aspects of labor re¬
| Major strikes ere long in the all respects identical.
W.
Labor and the parties directly involved in John
lations, which is pretty much the industries in which there was so
management have common inter¬ labor controversies. —
Clarke,
same thing as the end of our
much trouble last
year, it seems
sys-<
A first duty M. all neutrals is
ests in everything that pertains to
President
of
tem of free
enterprise.
When to me, will be avoided onlv if
to be truly neutisal.; That is im¬ John
production.
But their interests
W.
strikes threaten to
stop our en¬ labor and management in these
are
not
possible if we foife judgments on Clarke, I n c.,
identical
on
questions
tire
economy
the
government industries arrive at compromise
insufficient infornflation and align anno u n c e s
needs must act.
In such emer¬ settlements, particularly upon the concerning the distribution of the
joint product. Quarrels over the ourselves with ode party or the the
resump¬
gencies, the government must act central issue of wages. Neither
distribution of production are - as other, as we are pfone to do. It is tion of the
to end these strikes
by all means labor or management is a push¬
certain of all firm's invest¬
old as is production itself. These only when we a
within its power.
But I would, over in these industries, and nei¬
the facts that we ;an have an in- ment
quarrels
will
not
be
banking
heed
the
adjusted
Maxim
of
Disraeli, ther is it at all likely to yield its
|in any man- business
o n
solely by preaching identity of telligent opinion
"Never expose the
impotence of present position completely, Even
,the settlement April 1. The
interests. But neither is their hope ner contribute t
democratic government." I would if
compulsory arbitration were in¬ of
of a controversy.
has
peace in class warfare or its
reserve
|penerally, neu¬ firm
governmental
interven¬ stituted, the final determination
constant preachment.
back
I trals not in official positions can moved
tion, going beyond mediation and is almost certain to be a
compro¬
but
iittle dipectly towards into its preIt is frank recognition both of do
voluntary arbitration, to real mise. The real question is whether
common
and divergent interests settling labor difeutes.
emergencies and not dull the ef¬ such a compromise can be
But in¬ war quarters
worked
that there lies hope for reconcilia¬ formed public opfeion is a very in
the
Field
fectiveness of what the govern¬ out; by the
Lt. Col. J. W. Clark*
parties or must be
ment needs must do in
tion, Prof. E. Wight Bakke, Direc¬ potent/force fed 'bjm contribute a Building,
crises by dictated by government. This
pre¬
great deal towardPfinproved labor Chicago,
tor
of
the
too frequent use.
sents a test for
Labor-Management
and
collective bargain¬
relations.
will continue to specialize in miing—whether collective bargain¬ Center of Yale University, sees
Tests of New Legislation
the principle of "mutual survival"
The governmerfcas the repre¬ derwritings,
particularly
ing can be made to work in these
public
as
the key to the development sentatives of
Good tests of sound new
-u.
legis-t industries in which it is still very
th<|\ entire public, revenue bond financing.
of satisfactory relations between has
lation at this time seem to
new.
During Mr. Clarke's service in
important responsibilities in
me to
be these:
managements and unions. Unions the development of improved la¬ the Army, he served with Fifth
Clearly every change
Making collective bargaining will be militant and
in
the present law which
unreasonable bor relations. It is its responsibil¬ Army in Africa and Italy in mil¬
puts work in such a
way that it will so long, as they believe that the
labor in a less favorable
ity to establish minimum stand¬ itary government work.
In the
position preserve industrial
peace is not employers are
than it was before the
Deuartment
he
was
seeking to under¬ ards for the protection of the weak State
jn
Wagner any easy matter. As the bad ex¬
Act was enacted needs
mine them.
Managements will and the unorganized. In all the charge of the liquidation of sur¬
to be most perience in
some
industries, no¬ fight unions to the death so long discussion of new : labor legisla¬
carefully scrutinized and gener¬
plus in six countries, including
tably coal, in which there long has as
they believe that the unions are tion, the fact that much of our Canada.
ally should be avoided. It is man¬ been
■ ■* i
collective bargaining, illus¬
seeking to overthrow the system legislation for the protection of
ifestly unfair to impose restrictrates, collective bargaining is not of free
tions upon labor unions
enterprise which has made the, children in*; industry and of
which do a guarantee
against strikes. But our
With Fabian & Co.
not apply to
economy the strongest ever the lowest paid** and weakest of
corporations, which world
experience, I believe, has developed.
(Special to Thb Financial Chronicle)
\
represents combinations of
our adults has become meaning¬
capi¬ demonstrated that the best
hope
tal intrinsically much the
BEVERLY HILLS,
Managements need to get over less, has been entirely overlooked.
CALIF, -isame as
for industrial peace lies in
agree¬ their longing for the "good old
labor organizations. Further shifts
Protecting the employer against James B. Blair has been added to
ment between labor and
manage¬ days" when there were no unions. unreasonable
of authority from the
portal-to-portal pay the staff of Fabian & Company,
states to the
ment,
When managements seek to de¬ suits is a legitimate amendment 9500 Santa Monica Boulevard. -*
hjj-,
of
labor
and
management
Un¬
we even lack appre¬
v
^
,
John W. Clarke Has
.
§
Resumed in Chicago 4|
.
^
.
"
*
it 10
.
Volume
165
Number 4582
THE
COMMERCIAL & FINANCIAL CHRONICLE
(Continued from
15)
r
:
able than to do the
count
the
'
opposite and
ownership
ernment
bonds
garding
the
I
the
vi
roneous
ly to grow faster.
(Indeed it is
only if the fear of debt scares the
government into failing to main¬
That would
lead
to
er-
notion that national debt
enriches the nation!
The phrase "we owe it to
•
selves"
is
frequently
out-
repeated
nowadays
in mocking tones by
those who point out that the "we"
does not consist of the same
peo¬
think of the interest payments as
if they were paid to others—like
ple
-
the
the
as
"ourselves."
This
is
true.
We must not ignore the ef¬
fects of national debt on the dis-
international
from the first thing
us
'3
must do
yj.
lagently; with this
if
we
as
with
we
other
This
which
Internal and External Debt
individual wants to repay
gdebt he must make
i
■,
consumption
There is
cut in his
investment).
a
(or
real sacrifice.
a
half-confusion,
logically is
than
even
less
the
But the
labor
or
that
power so
just because
we owe
this
burdensome.
no
sible
This is
the.
interest
money
That national debt
paid
without
any
can
real
be
to
But since it is pos¬
to pay interest,
borrow
taxes
need never be imposed if
they would do harm. They should
be imposed only if there is some
other good reason for them quite
apart from -the-meed for money
the national
debt to ourselves.
|J
interfere with
the proper
working of the economy, stifling
enterprise and initiative.
They
may be taxes which are avoided
re¬
sacrifice
j^will not
taxes
be
to
fects of bad taxes. The evil would
even
be larger because the rate
of
dividend payments is
than the rate of interest
ernment
tionary
debt
the
that
so
on
the
would
pressure
greater and
greater
gov¬
infla¬
also
be
greater increase in
a
possibly harmful taxes
would
be
necessary. A growth of na¬
tional debt would have been less
harmful!
is
cause
analogy with in¬
sion.
it
It
would
result
in depres¬
taxes
is to have
answer
which would
improve the
bad taxes.
When
the
all
desirable
are
count have
more
to
offset
of
the
this
But
good
is
not easy.
taxes
their
on
which
own
ac¬
already been imposed,
taxes might be needed
the
inflationary effects
interest
payments on the
national debt, and then it would
be desirable to have even bad
taxes
provided
worse
than
they
inflation.
were
And
a
has to be very bad indeed to
than inflation.
not
tax
we
perity in
have
continued
pros¬
we
own
to
So
we
be
Perhaps the greatest
of the fears
that people have about the na¬
tional debt (second
only to those
associated with the false analogy
with private debt) is the fear that
it will bring inflation.. We have
seen that inflation
comes about
only if the total rate of spending
too great and that Functional
is
Finance avoids this and
prevents
inflation no matter what it
may
do to the national debt.
In fact,
it is only because of measures to
prevent inflation that we had to
be concerned about the evils
from
bad taxes,
"
•
Debt
others,
are
concerned
nevertheless intensely
the burden of
about
debt
or
whether
Political
interest payments on the national
debt.
They have made careful
studies of the possible growth of
.these interest payments in relation
to the national
income, and shown
that
on
if the government
keeps
incurring more and more debt
even
We
can
novf^turn
from
the
national debt.
|f there is a large
debt a great deal of interest will
be paid on it. -rJhe recipients of
the
a
interest
payments will spend
large part
hem.
If there is
$100, at $103
preferred
interest,
par
share and
per
dividends.
accrued
1947.
would be
ership
an
increase in the
own¬
shares in the private
businesses and corporations which
of
undertake
this
investment.
place of the interest payments
In
on
national debt there would be divi¬
dend
payments
on
these
shares.
On the other
ture
inflation
of
is
na¬
becoming
by
particular interests against
such taxes, or governmental econ¬
omies, as are really necessary to
prevent inflation can be coun¬
tered by showing the real harm
that would result from submission
to the pressures.
those
who
The interests of
would
inflation
the
harmed
be
can
be
by
mobilized
against the special interests that
gain from it.
would
If
The
same
The
by the United States District
Court
the
for
chusetts
district
March
on
of
10.
Massa¬
The
plan
provides for the elimination of all
existing debentures, and preferred
and common shares.
Proceeds from, the sale of the
preferred and common, to¬
gether with funds from the sale
new
of
$22,425,000
of
collateral trust
20-year
2%%
sinking fund bonds,
series A, (which the Association
agreed to sell to the John
Hancock Mutual Life Insurance
Co., of Boston, following the lat-
has
ters
bid
March
on
31
100.05
of
plus accrued interest) and neces¬
sary additional cash from the As¬
and accrued
1947
interest,
April 15,
on
(with
prepayment available
and after April 10) of all out¬
on
standing 5% convertible debenture
bonds in the following amounts:
$13,206,000 due Sept. 1. 1947; $4,-
747.000 due Dec. 1, 1948; $16,051,May 1, 1950; and $790,800
due Jan. 15, 1962.
The Associa¬
000 due
tion
also
will
retire, at the
same
price, $203,700 of its 6% deben-%
tures due Nov. 1, 2031.
Under
the
1,246,011
new
•
being
issued
plan,,
at
total
of
shares
are
a
common
this
time.
present. $5.50
holder will receive
preferred
Each
share¬
eight
shares
of new common for each share of
preferred
held
and,
in
addition,
will receive transferable rights to
subscribe for five additional new
shares
of
equivalent
those
at
common
share. In addition,
to
$9
common
the
per
shares
number
unsubscribed
of
transfer¬
on
able
rights, if any, will be avail¬
for subscription by holders
$5.50 preferred up to 20 shares
able
of
of new
common
for each share of
preferred held.
As
part of the plan there will
be terminated all litigation pend¬
ing between the Association, Util¬
ities Investing Trust and various
corporations and interests which
part of
are
Electric
to
affiliated with
Associated
System.
the
against
settled
are
or
former
Gas
and
claims
The
Association
will
be
by payment of $1,944,550
Utilities
Investing
and
Trust
the trustee of the Estate of Asso¬
ciated Gas & Electric Corp., the
former
receiving 75% of the total
and the balance
ter.
all
going to the lat¬
Upon payment of this
of
shares
the
of
sum,
presently outstanding
$7
cumulative
preferred
and
common
which
now
held
second
shares,
democratic society is to
live, it will not, be by embracing
defeatism and habitually conced¬
Investing Trust, will be canceled.
ing victory to the irrational. De¬
can live only by faith in
tendency of truth to outlive
Heilman With Mason Bros.
our
mocracy
the
error
and
tradition.
of
reason
to
conquer
Reason teaches
us
that
the greatest dangers lie not in the
possible
growth
that
tra
would be
fear of it.
spending out
hand, the true
somewhat clearer to all. Pressures
In place of increased spending opt
of
the
interest payments thefe
increased
and
the
already the required total rate of
spending in the economy this ex¬
spending Will have, to be off¬
value
convertible
beneficial
of
sociation's general funds, will be
applied to the retirement, at par
Problem
force.
prosperity comes
ership of government bonds there
imaginary to the real burden of
shares
,
The
have this dilemma. After
was
ourselves and
mulative
a
this as the alternative should b e
sufficient to rule it out from se¬
rious consideration.
worse
.r/j,rThe
'external debt which is owed to
Corp. headed
banking
group
which offered to the public
April 2
77,625 shares of New England Gas
& Electric Association 4V2% cu¬
markets.
primarily because about in
any other way.
terpersonal debt does not hold. this
prosperity could not be main¬
The maintenance of prosperity
International debt, like interpertained by the old rule that the
involves a growing national debt
isonal debt, if allowed to grow too new rule had
Jp, be worked out.
only to the degree that there is
big; may indeed be compared to The
theory of*tt'was first com¬ insufficient
private
investment
mans-eatingi tiger. But internally pleted
by the late Lord Keynes; and the
gap is filled by govern¬
held national debt has no such
The new rule is called Functional
ment deficits. Prosperity without
potency either in borrowing or in Finance
because._by freeing our government deficits is possible
-repayment. It! is another kind of financial
policy from the budget^himal, a tabby cat whose greatest balancing tradition (which is only if private investment is great
enough to prevent this, gap from
danger lies"in -the panic that may based on
nothing, but the great appearing. If
private investmen
^ arise from it§ being mistaken for false analogy) it sets our financial should be
great enough the growth
J a tiger.;
•
machinery free td serve the basic of. national debt
would be ayoidec
function of maintaining: prosper¬ but in its
Interest Burden
place there would be an
"J J Many people who recognize the ity. /vr.
'■
I
equal growth Of private* debt.
In
difference between internal debt
The True Burden of National
place of the increase in the own¬
.which
Boston
investment
expiring April 16,
offering under rights
capitalist society, and is at $9 per share. No offering by
in fact the evil is
slightly less if the underwriters is expected be¬
the
prosperity is brought about fore the end of the subscription
by measures involving the growth period.
i'/SV;
of
national debt than if it is
The financing is
being under¬
brought about by sufficient pri¬ taken
pursuant to the Association's
if
l
the
The First
an
rights
curs
appear so surprising if it
But it is also argued that if we
by the government to pay the in¬ the postwar boom it
in mind that
may be nec¬
incurring terest.
freely permit national debt to
debt does
essary for the government to keep
not;, have the
At this point we must observe a
grow, giving up the restraints of
on
benefits in the first, place that
spending more than it collects
"sound finance1' we will not be
silent development of the utmost in
taxes, in order to prevenjt ^de¬
^private borrowing has. An indi- importance. In eliminating the
able* did overcome political resist¬
pression. If it borrows the extra
;*yidual who incurs private debt by
ance td the taxes which
imaginary evils-that are conjured
^borrowing from others can con- up by the improper treatment of money this will increase the na¬ come necessary for the may be¬
prevention
tional debt. The increase in na¬
sume more than he is
producing; national debt as if it were owed
of inflation.
tional debt will increase the in¬
has a temporary increase in
to others we have completely de¬
This argument amounts to say¬
terest payments and these will in¬
hjs consumption possibilities when
stroyed the basis for "sound fi¬ crease the
he borrows and
spending by those who ing that we must retain the old
conversely he has nance." We can no
longer have receive them. As these
J: to pull in his belt when he repays.
expendi¬ "sound finance" rule although it
any respect for the precept, which tures
The nation does not have to
keep on growing, the gov¬ is based only a false analogy, and
pull is
appropriate to external debt ernment will have to increase its cannot accept the Functional Fi¬
in its belt when it
repays a nabut irrelevant for internal debt,
nance rule in spite of its
being
J tional debt to its own citizens be¬ that we should always try to avoid taxes in order to prevent excessive based on
reason, because the first
cause it is unable to let out its
spending and inflation, and addi¬
it.
Once the irrelevance of the tional
belt when it borrows.
taxes may have bad effects. rule- is more easily enforced.
analogy is uncovered there is no We must either suffer
The obvious rejoinder is that
unemploy¬
International and! Interpersonal
reason left for the precept.
With ment; or else be
prepared to en¬ there is no sense in applying the
Debt
this basic financial precept gone
dure the bad effects of such taxes wrong rule
only because it is easi¬
This
harmlessness-cum-impo¬ we need some' other criterion to in the future.
er to apply. But the more
important
tence is not true of
borrowing by take its place as a guide to pub¬
point is that the argument is false.
a nation from other nations.
In- lic financial policy.
The Evils of Prosperity
The old rule has lost a great deal
ff ternational borrowing is really
of its traditional hold ever since
"Functional Finance"
As between these two horns of
analogous to private or interper¬
it was observed that in spite of
The new criterion is ready to
the dilemma there can be no doubt
sonal borrowing because, like in¬ hand. It
the most terrifying warnings the
prescribes such a regu¬ that the
damage from unemploy¬
terpersonal borrowing, it is from lation of government spending in
world did not come to an end
ment is very many times greater
J others. The borrowing does in¬ relation to its
when we passed the $47 billion
taxing that the re¬ than the
crease available
possible harm from such
consumption, the sultant total rate of spending in
national debt limit or even when
debt does indicate a measure of
contingent future taxes. But even
the economy, public plus private
we passed the revised $55 billion
these ill effects are not really at¬
1 poverty or subtraction from nalimit.
With the tremendous in¬
spending, will be maintained at tributable to the
growth of na¬
J tional wealth, and the repayment the level necessary for
prosperity. tional debt. They are rather the crease in national debt during the
\ of the debt is a real burden that
A higher rate of spending must be
effect of prosperity in a capital¬ war, and with no observable caI involves a decrease in available
avoided because it would result
istic economy, whether this pros¬ tastrophies following from it, the
| consumption. But the national in inflation and a lower rate of
irrational
sanctions
of tradition
perity^ is brought about by a policy
I debt of the United States does not
have lost much more of their
spending must be avoided be¬ which involves a
I consist of obligations to other na¬
great national
so
Association Stocks
•
the
national
tions, and
New England Gas & El.
group is underwriting an offering
true nature of the of 479,235 common shares
being
so-called evil from national debt. made
by the Association to the
It is really a result of the
accumu¬ holders of its old preferred stock
lation of private wealth that oc¬ under
This
borne
is
First Boston Offers
same
would
47
illegality and' black vate investment. The evil can be alternate plan of
recapitalization,
They may be bad in avoided only by avoiding pros* as
approved by the Securities and
perity. The explicit spelling out of
many ways.
Exchange Commission on Feb. 11
and result in
still
do
■
chinery
get¬
distribution of wealth rather than
worsen it and which would
help
rather than hinder the working of
the economic mechanism—in a
word, to have good taxes and not
; repayment of national debt does would have to be raised by taxa¬
tion and the taxes might be very
wiiot destroy any productive ma¬
"real sacrifice is involved.
which
The obvious
de¬
are
to
private in-
an
^
while the rich
poor
ting richer from the receipts of
the interest payments on
govern¬
ment debt.
They may be taxes
More
We
the
contingent evils from the bad ef¬
impoverish the nation.
they do not constitute a
complete ac¬
ceptance of the analogy with in¬
terpersonal debt, seems to be based
on the feeling,
especially difficult
to dispel, that while it is undesir¬
able to get into debt it is doubly
deplorable to ^ borrow money to
pay interest on past debt.
If it were really impermissible
dividual's wealth.
If
:
peculiar
fensible
1 in the same
way as private debt
?i is a subtraction from a
;
But the interest pay¬
enrich it.
real effects of national debt. The
first thing is still to get rid of the
false idea that national debt is a
Jj subtraction from national wealth
Vj
see
ments, like the debt itself, also
stay within the nation and do not
impoverish it any more than they
<
:
in the case of the national
debt itself.
to deal intel-
are
can
sion
'
tract
interpersonal or
debt—even though
through the confu¬
on
they
}; tribution of wealth between* dif¬
ferent members of the nation. But
we must not let these
voices dis-
interest
the
payments.
exactly
prevent inflation, and
there would be
exactly the same
subtraction from the amount of
goods available for the people to
tain prosperity that the interest consume.
They merely prevent
payments are.Jikely to grow in higher prices being paid for the
proportion to the shrunken na¬ same goods in inflation. The evil
tional income.)
lies only in the
possibility that
Although such calculations are the additional taxes may be bad
interesting they are useful only taxes. They may aggravate the
to allay the fears of those who
inequality of distribution by taxing
the
no more
needed
directly
Even
have
problem.
may
The national income is like¬
come.
gov¬
disre¬
of
unusual but
more
Of
while
obligations
government.
t
(which
dividend
would
possibly be necessary set if excessive spending and in¬
tional debt
because the nation to keep the total rate of money flation are
to be avoided.
This
includes the individuals to whom
demand in theCfconomy from fall¬
generally means more taxes;
It
the debt is owed. To count
only ing to depression levels) the inter¬ is in these extra taxes that the
the obligations and to
disregard est payments would not increase evil is to be found.
the creditors is no more reason¬ in
The taxes themselves do not
proportion to the national in¬
page
the
of
Should Have No Fear of National Debt
(1827)
itself
but
can
in
thO
of national debt
foolish
arise from
an
by Utilities
(Special to The Financial Chronicle)
OAKLAND, CALIF.
—
Charles
E. Heilman has been added to the
staff
of
Bank
Building,
policies
irrational
are
Mason
Bros.,
members
San Francisco Stock
Central
of
the
Exchange.
48
THE COMMERCIAL & FINANCIAL CHRONICLE
(1828)
:
then
subscribers,
Looking Ahead in Casualty, Insurance
(Continued from pago 9)
national income almort <>100.000,-
had
000,000 greater than that bf 1929
I could believe that these
figures'
dre certainly
side—perhaps
the conservative
on
even
be relied upon.
i
If
recall
we
longer
no
to
it
only
that Financial
in
appearance
that
and
was
the
laws
thirty-seven'
states,, including the District of
Columbia, we can readily see why
automobile liability and property
damage premiums have increased.;
years
ago,
it was estimated
income?
1920
changes in aircraft construction
jurisdictions,
high
a?
as
With these laws
in effect and with the poten-
now
»ti?li increase'* in
the number of
rpotor vehicle units contemplated,
there
a
.
seems
to
linps for both
'£•
to be indicated
me
tremendous increase in premifv' *
company and agent.
; ,l
i
^
;• v-
«•*
-•;>
•
A:..*?
i
.•
j'
Trend- of Premiums
There ig one other factor which
seems
to
should be taken into
me
and
account
which
that
is
premiums
on
the
trend
automobile
-
of
has
cars
resulted
accident
rate,
-
in
a
despite
the "efforts of safety campaigns. I
will
be
faced
with
under¬
an
over¬
simplification of the situation but
have
Many prophecies are heard that
depression will occur! during
borne out, it would indicate
mium
workable law will emerge which
will correct abvious abuses while
preserving for labor its legitimate
gains. With harmony existing be¬
volume
well in.
view wil best:
a pre¬
excess
No agent, therefore,
despite, the; present outlook, can
ignore this line and its jaotential,
although
my personal feeling is
that the automobile will reign su¬
preme in
should continue for at least
ade.
a
dec¬
our
business
workmen's compensation lines are
the same on which to base any
ence
to
and
have
which
a
should
beneficial
it in the future.
ef¬
3.* Permit
which
we
call
healthy
*
competition
with an opportunity for reductions in rates where justified.
mestic
needs/but
American
to
assureds
protect
in
throttling competition
ling initiative.
these
trends.
One
Mr.
Wendell
United
States
their
of
these
Berge,
or
with
•ment in- this business in the
years
which it deserves.
quote
from
I have only to
by Elmo
Roper, made" this year, to prove
this point* This survey shows that
a
survey
whether
proper,
.a
^^forthcoming in;
which provide a,minimum of reg-;
ulation consistent with Public Law:
15
is^the: propiersbne"and,^unlegs:
this
view? prevails; it -may haveserious effect upon the future -
a
of
casualty production for insur-:
Assistant
new
ideas,
to
well
as
succeed.
.
.
„
- * ;
_
v.,
>
There is another question con¬
fronting. the.
which
tant
has
also
insurance
industry
may
effect
arisen
because of the
over¬
the opportunity
Risk and uncer¬
as
.
of powers granted to cas¬
and fire insurance compa¬
ualty
nies by
new
and new products.
The
right to venture implies the risk
of loss
\
agents.
ance
various state legislatures.
Overlapping Coverages
processes
You
the
will
all
recall, I
conflict which
arose
am
sure,
in
con¬
.
nection with the personal property
floater until the New York Insur¬
tainty are the price we pay for
right to exercise our talents ance Department took cognizance
of the matter and, in cooperation
freely..
There are businessmen
who, although professing belief with other states and committees
serve the regulation and taxation
'ri a free enterprise system, actu¬ of fire, casualty and marine un¬
of insurance to The states.
You ally do ribt want one. These men derwriters, mader a study of pre- 1
have all heard many speeches and
As a result •
want to ^eliminate risk from the vailing conditions.
have read many pamphlets about
there was brought forth the somarket
by
private
restrictive
the
.
.
.
compensation line. It can be said
Hhat there was. no great develop-
would
rate
Attorney General, lapping
losses,; the premium in¬ "other liability" or "miscellaneous
steadily increase, (re¬ liability." In ten years'this classi¬
sulting in increased business for fication has grown from $65,232,j the
companies
and
increased 171 'to $118,514,000 and there is these bills and it is not my pur¬ agreements which guarantee them
pose in this address to attempt a
profit for the agents.
1 still a tremendous unsold market.
against the discomforts of com¬
•' Let use now
look for a minute Many companies' and agents have discussion of them. Still, I can¬ petition.
They want to sup¬
•
at the record of the workmen's not given this line the attention not discuss the future of casualty press new
products and processes
will
restrictive rate law,: i,sin-5
doubt
have an impor-^
upon the industry as
stif¬ a whole and, therefore, upon the
casualty business. This question
has declared that, "Private initia¬
tive is allowed a wide latitude for
However, venture
there are factors other than eco¬
nomic which may greatly influ¬
a
cerely
the development of anything like; a reasonable period.;
broader and simpler froms I, therefore, believe that the view-,
of the group supporting state lawsof coverage/
v %
.
on
under
new,
to expect that stock casualty pre¬
struggle for world markets. ?miums will pass the $1,500,000,000 5. Provide restraints? to prohibit
mark within a very short time.
sinister
self-interests
from
fect
classification
..
2. Encourage
'
1
will be greatly increased
produc¬
tion in all lines. It is not too much
The conditions which make pos¬
sible a favorable prediction for
the
future
of
automobile
and
the
"
>
hundred miles or less; / .v-.
r
From the foregoing it would ap¬ 4. Permit authorized activity at
pear that the future of casualty
home and abroad to enable ininsurance is bright and that there |
surers not only to supply do¬
continue
.
•
every
reasonable insurance need;
transportation involving
one
'
-
1. Enable the public to fill
of
$100,000,000.
feel that the leaders of labor have
analyzed pretty carefully the 1946
elections and are prudently soft¬
ening;thefe demands > to remove
from Congress the urge to pass
punitive -labor: 'legislation., I am
hopeful that, with this pressure
reduced, a sound, sensible and
•
seen some
dieate
1946. This I do not anticipate as I
writing
come
companies and producers.
For instance, we recently had a
risk submitted to us requesting in-.
all
should
consider - carefully fully, qualified to accept or decline <
figures which in^
that, within the next ten which will provide the best mar¬ such a piece of business and to-,
ket for this great increase in pre¬ quote a rate thereonbut if such,
1947 whieh will result irt a de¬ years, there will be at least
250,000
miums which I have predicted. a piece of business were submit-creased national income but 1 can¬ actively
flying civilian planes of
not agree with this view; In my all types. If their
should ' consider
which ted to an insurance department;
predictions are Agents
a
ig the situation created by the
anticipate that, at least for a few
years, this condition will continue, estimate of the future in the other passage of Public Law 15 and the
♦necessitating further rate in¬ classifications of the business. I fact that most state legislatures
creases to offset the adverse loss
im
particularly impressed with will have for consideration this
experience; and, while the compa¬ the possibility for development in year rating bills designed to pre¬
nies
is
this
seem to be:
tween labor
mounting
by the federal author¬
Doubtless
(1) the major obstacle my description is sufficient to iSurance to cover, as .follows; -,Aof the weather, (2) speed neces¬ identify the; two groups to which newspaper desired to offer a re¬
1940-^——
ward
to the first individual or
sary Tor -flying,
1945
(3) inadequate Supt. Dirieen of New York "re¬
human reactions to conditions and ferred in his address, "The Battle group responsible for a successful,
1946—
of the Bills," at; Pittsburgh/ last flight to, the moon ,and,;return.>
(4) potential congestion.
The estimated figure for 1946;
Ultimately these obstacles will month. The tradecutrently They q desired" Insurance /in the,
is a distinct surprise as it was exbe overcome and, probably in the reporting the activities before the amounV Qt$50,00Q;, to coverthe*
various state legislatures, clearly payment • of > a j' reward
pected that* 194-3 • would* show • a,: light
of - American
/ in t like
know-how,
large drop from the war time high sooner
reveals the schism existing .be¬ amount, to cover for ten years
than we think.: Manufac
of 1945^ and probably would not turers
of planes have been optim¬ tween these two groups* One/of from"" the/ p«^nt
exceed $130,000,000,00d. *
;';.
istic in their predictions and I these viewpoints will, prevail and trained, private underwriters. are,
1930
and management, we
public liability and property dam¬
Public Law 15
should go forward into an era of
Because of gasoline
increased production and an in¬
So far we have considered
rationing and the restricted use of
only
creased standard of living which the economic factors which affect
automobiles, premium rates were
u.se
thirty days, it. would sub¬
surance
ities.
age will take.
arbitrarily cut during the war and
have only now begun to be in¬
creased.
The
greatly increased
at most
stitute bureaucracy for the com¬
bined skiH and- resources of in¬
tervention
as
know it today, the difficulties
to be overcome in this line would
that only one automobile in three
was insured for liability and prop-: opinion, the only thing which will
cause a recession is a long-con¬
erty damage, whereas the number
tinued
period; of labor-manage¬
bf automobiles now insured runs,
ment strife such as we had in:
in some
nine out of ten.
as
covered
by
state law)'it does not permit in¬
we
$65,928,000,000
68,858,000,000
77,574,000,000
161,000,000,000
164,000,000,000
(inasmuch
are
.
several
these
now
hove been passed in
Ten
national
—
that
Responsibility laws began to make
their
the
—-
-
about ten years ago
states
upon
The record shows the following:
activities
these
rThursday, April 3,: 1947
.
.
insurance without some reference
which will render
to their possible effect upon: the
supersede the old.
industry.
,
.
.
Nation-wide
Definition
This
was
culated to eliminate many
of
cal¬
exist-,
ing overlappings of coverage as
well. as. of; writing, power among
fire, marine and casualty compaBut the
obsolete
.
-
called
Marine Insurance.
and
nies.
The situation which created
.
-
of any group must, not be
the heed for such, a definition still:
perverted to serve selfish or spe¬
interests to the detriment (if renj.ained 9ndt there seemed ijo be
ture— enough for all to share- and the broad * socia 1 or econom
.came
greatly, standardized oSmd
ie or¬ pressure from many sourcbsTbr a
further shows the very great po¬ for
.uniform., We do know,
all
to make:--a satisfactory der,' They -fhV&t hdt fiirther Mo¬ definite-solution of ther problem. "
however,
tential which exists for burglary
profit. But is this our only con¬ nopolistic practices or restrict the It 'Jvai contended" thatr tire sblutiori.
^hat" industrial' activity, employand
accident insurance and the cern? What about
the people who freedom of the channels of com¬ to this question of overlapping of
^vipent and wages are major fac¬
figures on these are 84% and 72% will buy all this
tors in the. production of work¬
insurance—pay merce. Social responsibility is a coverage would be the granting, of
•
*
men's compensation
all these premiums? How will the
•; ,• • ■
multiple line underwriting, powers
premiums. As respectively.
necessary characteristic of group
so
that both
fire and
Workmen's compensation rates are
casualty
industry serve them? Will we-re¬ activity."
'•
>
Aviation Insurance
turn to our position of 30 or. 40
companies could provide'coverage
usually based upon payroll, we
to their policyholders in this noknow that, as payrolls
Free Market in Insurance
Although it seems to me that years ago when we said to our
/
increase,
man's land of conflict between the
there is a fine future for all classi¬ clients,
"Here's
the
premiums likewise go up.
: '
policy we
Following the thoughts pro¬
fire companies on the one hand
fications as we know them
think you should have.
Don't pounded by Mr. Berge, it would
today,
I cannot see
/Workmen's Compensation Inany new line on the argue about it or the rate—take appear reasonable to accept the and the casualty companies on the
$y.:/ /J suranyc:
other.
horizon whose potential can equal it or leave it!" Or will we follow
premise that the policyholders'
.
Let us consider what the future the development in either work¬ the trend started some years ago interests are best met by a free
Multiple Line Underwriting
of workmen's
compensation insur- men's compensation insurance or of fitting insurance coverage to market which offers reasonable
It might be well here to define
$ ahce may be. It is common knowl¬ automobile insurance. Many feel the client's needs? The year 1947 competition. In such a market the
edge that wages - today are far that the aviation line will be the will provide the answer to this policyholder can purchase insur¬ what is meant by "multiple line
greater than they were just five one to do this and there is no
This means the
ance
at rates suited to the re¬ writing power."
ques¬ question.
years ago but few of us realize
tion that if will produce a sizable
transacting of all kinds of insur¬
When the 79th Congress,
by the quirements of the risk offered.
how much. For
volume of new premiums for the
ance,
except life and annuities,
instance, accord¬
a
market constant in¬
passage of Public Law 15, gave to In such
under one corporate charter, and
ing to the United States Bureau industry.
The highest premium the respective states
and
the right to novation
improvement
of a
of Labor
license issued to the corporation
Statistics, (the average volume ever reached by this line regulate and tax
insurance, it gave policy forms will provide
the
weekly wage for the period 1936 was in 1941 when the figures
them very broad powers. With the buyer with contracts which are by the states permitt'ng the trans¬
to 1939 was $23,
action of all kinds of insurance
According to. this stood a t approximately $11,000,- exception of acts or
agreements of always
up
to date and broad with
same, source, the figure for ; the 000 but, because bf the
/ the
exception ! noted. .'Of
war, this boycott, coercion- or
intimidation, enough for his requirements. Un¬
year 1942 was $42.57 per
dine suffered a considerable reduc¬
course, we all know that under¬
week,
the various anti-trust acts shall der reasonable
competitive condi¬
which is an increase of 85%. De- tion in volume.
writing is ihe practice in the in¬
My own company apply only to the extent that
the tions, the insurance producer re¬
surance business whereby an in; spite the fact that, in 1942, wages believes so firmly in the future of business of insurance
"is not regu¬ mains free to negotiate in respect
were
this classification that it has set
suror accepts or rejects an insur¬
supposedly frozen in most
lated, by state law."
to the insurance requirements of
ance risk.
To underwrite from a
industries, the average weekly up a special department to handle
his clients. New risks, new proc¬
In the days
wage in 1945 was
iL This is '< for the
immediately follow¬
multiple line point qf
trifere$44.35, a further
purpose of pro¬
ing the passage of Public: Law 15, esses, and unorthodox risks can
increase of 4%. TMs was du^
fore, is to consider toe risk of-;
pri¬ viding. our agents with a facility
it was generally believed in the all be handled promptly in the
fered with: relatioh fd
marily to the fact that longer which will enable them to become
plr hazards
industry that only the most rigid regular course of business.
hours were worked,
and exposures to wliich
thereby in- familiar with the line and to reap state
the,'as¬
regulation would remove the
Does the All-Industry bill sup - sured and his
voking the use of overtime scales. the benefits of its growth.
property may? be
business from the threat of
With the end of the war
prose¬ ported by the group believing in subject.
After due consideration,
the num¬
It is my belief that there will
cution under the anti-trust laws. rigid
ber of hours in the work
regulation
by
the
states there may result a single contract week be
great development; in- com¬ As time
were reduced,
passed and the subject meet the foregoing objejetives? In
incorporating many 'cj iff e t e h t
resulting in a re¬ mercial airlines and their feeders. was
studied more and more thor¬ theory, it
duction in the
may, but in practice, it kinds of iasurance or there may
average weekly 1 also see a great future for
air oughly, the
industry split into two has been found that it is subject result several insurance contracts.*
-'wage.
However, because of the express and freight. Planes will
camps. ; One group feels that the to interpretation and administra¬
almost blanket wage increase
of also be employed for charter
The question of multiple line
serv¬
first view was the correct one and tion which throttles
lofaVc which occurred in
competition
1946, the ice, crop dusting and other com¬ the
underwriting is neither the brain¬
other group: considers
estimated average weekly
that, and" kills " initiative. Further, by
mercial
wage
uses.
I
am
convinced, provided the law contains provi¬ imposing upon the insurance com¬ child of a small group of company?
Tor: 1946 will be
executives nor of insurance agents
approximately however; that there are still ob¬ sions for the licensing
andregula- missioner^ the wholly
impracti¬ but
stacles to be overcome before
tlie same as 1945, or
is
a
development broughta
$45.00 per
tjort of rating organizations, for cable duty of reviewing and ap¬
private passenger plane becomes
about because of the conflicts men-iweek.mfehihership iri such organizations proving thousands upon thousands
as
necessary or as-useful as a pri¬ and for the
Now then, what effect has this
filing of rates by such of rates and classifications within tioned above and because of the
vate -automobile;
^Barring: Radical organizations on. behalf; of their a brief period of fifteen
days, or desire of many insureds to secure J
•
immediately prior to World
II
and
thai?
rates
and
War
forms'be-
93.%
of;ali the people do not carry
residence; * liability. - This survey
power
There will be plenty of casualty
business to be written: in the fu¬
cial
,
v
r
-
•
•
,
-
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4582
Volume 165
will facilitate greatly
in reaching
one policy to cover their insurance
the large unsold market for mis¬
needs.; Because this question de¬
manded
solution,
Commissioner cellaneous casualty coverage. We
Harrington Of Massachusetts, "then all know that it is impractical for
President of the National Associa¬ an agent or a solicitor to conduct
cold canvass for many single
tion of Insurance i Commissioners,
appointed a committee on multi¬ lines of insurance because of the
ple line underwriting to consider
and to report its findings to the
National Association of Insurance
premiums and correspond¬
ingly small commissions resulting.
This situation would be greatly
small
where a solicitor or
June 1944. This committee made agent could approach his client
five specific recommendations as on the basis of complete coverage
Commissioners
its
at
meeting
in
improved
perhaps a finance .plan
payments of the resulting
premium possible.
follows:
and with
1; Underwriting Powers of United
to make
States
Companies
^Countries
—
in
Foreign
To
Any domestic fire,
marine, casualty or surety com¬
pany should be empowered to
write any and all kinds of insurance ' or reinsurance other
than life insurance or annuities,
,
the casualty busi¬
by leaps and
and, to me, the economic
appear to be such that it
will
sum
up:
has
ness
grown
bounds
factors
continue
do
to
so.
The two
immediate
problems other than
on risks
outside of the United economic appear to be the course
States, its territories and pos- which legislation will take under
sessions, provided it maintains Public Law 15 and the question
^ a mininjum' policyholdera* suj> of* multiple
line .underwriting
powers. If both of these problems
plus of $1,500,000.
/
2. Reinsuring Powers — Any fire,
marine, casualty or surety com^
/; pariy should be empowered; to
: accept any and all kinds of reinsurance, other than life.insur¬
ance and annuities, provided, it
maintains a minimum policyholders' surplus of $1,500,000.
-
-.
solved
are
in
iiiterest of the
the
public and not in. the selfish iriterr
est of special groups, I;can see no
reason why casualty; insurance,; or
let me say property and liability
insurance, will pot-astonish us by,
the growth it will experience.
•
3. Automobile: Insurance
;
Any
marine insurance compariy; or any casualty or'surety
company licensed to write lia¬
bility insurance, should be em¬
powered
to
write
insurance
against any and all of the haz¬
fire
.
'
or
ards
of
loss
from
damage
to
Plymouth Rubber Stock
Offering All Sold
F. Eberstadt &
Co., Inc., and E.
Clucas & Co., managers of an
W.
underwriting group, offered pub¬
Bates Mfg. Go. Slock
Offering of 54,905 shares of
Manufacturing Co. com¬
mon
stock
($1.0 par) was made
April 2 by a banking group head¬
or
accrue
to the company.
The company was
Maine laws •
'
;
Mill at
•
Saco, Me.
-'
"'4/
'■
riety" of cotton and
rayon
fabrics
both in the -form of finished goods
andgrey goods. -Among the • eojh
ton fabrics produced are jacquard
woven. bedspreads, ready - made
drapes, \ drapery
fabrics/' table
covers,
upholstering cloth; ripplet t e
hospital
bedspreads,
combed; percale bed sheets arid
pillow cases, lawns, twills, drills,
broadcloths, poplins, fine muslins,
batistes,
organdies, grey arid
starched drills for the shoe trade,
flannels, soft-filled s he e tings,
duveteens, napped flannels, laun¬
dry felts and various specialties:
in the napped field. Among the
Y.
.
recommendations offered
their
With Olsen, Donnerberg
a
ter
H.
H. Schaefer
thai
Olsen,
Donnerberg
I
h^ye briefly outlined..
As with
^Public Law 15, it is not
intention in this address to
fully discuss this question of mulmy
,
ST.
MO.-Thomas J.
Hagan, John R. Heslop and Wal¬
418
ijipbn the part of the pub¬
for, d
simplification of policy
The public cannot under¬
stand, why. a household contents
policy can insure a grand piano
but cannot include an automobile
forms.
as
a
I,
line
;
'
fact
,
few
I am further convinced
of
years.
that, when
will place in the hands
agents an f instrument which
it does, it
Morton
offices
York
Banks
M.
at
115
has
opened
Broadway, New
City, to engage in the se¬
curities business.
Mr. Banks
was
previously vice-president of Newkirk & Banks, Inc.
ready owing the U/ S. A: more
;han $1.9 billion on Export-Import
Lend-Lease settlement,; 3C/. and
surplus-property
account; owing
$250,000,000, the
United Kingdom about $400,000,for
about
asking the World Bank
$500,000,000 for only part of
-
the Monnet Plan,
>
:
'
-
,
"
*
deliver, but will not indefinitely
members of a, for therh,
sterbe-organizat on, u is said.
-Ja
remain
Another idea in circulation
friends cf Bretton Woods
watching is
a merger
and
Some
Bank.
opponents
Policy
on
Loan Terms Awaited
A second matter of Bank
policy
being watched in Wash¬
which is
of
is
This
was
Two With Hornblower
i
ST.
LOUIS, MO. —Howard
R.
Olive Street.
;
|
jvl
And Weeks
,
(Special to The Financial Chronicle)
DETROIT,
MICH. —Walter E
Kalb are with
& Weeks, Penobscot
CINCINNATI, OHIO —Adrian
joined the staff of
Westheimer
& Co., 326 Walnut
Street, members of the New York
and Cincinnati Stock Exchanges.
-
K. Wuille has
banking., A merger could in fact
be -accomplished
w i t h o u t; ah
amendment of the Bretton Woodfc
agreements, .i were
with
will
the rate of
be
fees in addition to compensation
for the cost, of distribution? .Will
the i, Bank promise investors to
limit its total issues?
-
been ai report that
backing in high Bank
There
there
has
is
circles
for
limiting
the-Bank's
activities to its hard-currency cap¬
ital,! namely the capital furnished
by the U. S. A. and Canada. ; The
idea, at-least, has been discussed.
To friends of Bretton Woods sudh
policy would be most objection^
One objection would be' that
the World Bank was to be ar$l0
a
to do would
and
be
billion
international
institution,
but if in reality it were to become
virtually
a
would
U. S.-guaranteed bank,
be; a very expensive
American bank; for it will be selljngbondsat more thanthegoirjg
Bank.: The
tors,
Horton.
—
Clyde,K.
Jr. has become
Kidder, Peabody &
Devonshire Street.
with
,
..
executive
Fund
direct
in
turn, might appoint the
person to the posts now held
by McCloy and Gutt. Then, you
same
would
have
question
Bank
The :next
merger/
be
whether
versa.
For the Fund by i's
needs
always to have its
nature
executive
directors
alternates
or
present,
tion
by
as
was
argued
for the American
will
when
come
Dr.
delega¬
whereas the
Savannah;
at
time
the
merged with the Fund,
was
vice
or
a
would
Bank
the
'if
;
•
Possible
Shift
to
York"
New
St:ll another idea in circulation
which friends of the original Bret¬
ton Woods program are watching
is the mat'er of moving the Bank's
headquarters
New York.
to
something
was
Canadians,
as
wanted y. at f;
would be a
the
well
This
British; and
as some
others,
Savannah.-;
Also, /it
generally wel¬
come to the financial community.
But it would not be welcome, to
those
move
who -fathered
the .Bretton
Wpod s program and who feel that
the "Bank has now become Amer¬
ican-eontrolled-^yet
not:: Amerl-
can-Government-c6ni^olled. 'J
»ot
all
/if-;
isi^pointed ociat,
op&ion.-in the
..Incidentally, at
financial
Mjdv^st and .elsewhere is pleased
rate for Treasury obligations of
corresponding maturity and giving
with the changes which have coriie
investment bankers and others a
"cut." Were that to be the outr
For
come, it is argued, it would have
been better in the first place to
Bank;„and refining the matter still
further, "too much Chase Bank"
let- the Treasury raise the rhoncy
in
and
tional
the
lend
-
Export-Import
Bank
The
overhead
the
of
World
Bank, it is further pointed out, is
than
more
that
double
Export-Import
the
of
Moreover,
people would be asking: "Why the
Bank.
Rube Goldberg device of all
foreigners to lend American
under
the Bank ;in; recent weeks..
oyer
one thing, they fear there
may
be "too Jhuch Wall Street" in > the
particular, since the Chase Na¬
Bank
purely
American
anty?"
these
U*
Opposed
continues:
This
was
bank
providing, among other ad¬
an international forum
be
an
international
vantages,
World/Bank
prom¬
and
semi-official
capacities
in
Washington and internationally.
Bond Club
Re-elects Steinecke
PITTSBURGH, PA. — At the
meeting of the Bond Club
of Pittsburgh held Tuesday Eve¬
ning. March 25 at the Roosevelt
Hotel. S. W. Steinecke, Secretary
•
annual
It
capital-movement problems.
to bring communal thinking
to bear on national policies. Thus,
if 41 countries disapproved of the
Other
v
Ernest
O..*
was
single member is follow¬
would mean much more
a
if
the
was
a
U.
S.
A.
alone
ex¬
bait
that it
for
was
the Fund,
to be used
Co.,
Robert
Co,
Lear
of
year
1947-48.
elected
officers
of
Do~br:tT
were
Moor0,
Lynch, Vice-President;
Dodworth of Parri§h
and
Treasurer,
Kost of A.
&
fiscal
Stanley
L.
Johnston
James
&
J. 'M.
Edw.
C.
E. Masten & Co., Sec¬
Governors
retary.
prime reason for the
the writer
is told., Toelucidate, the Fund
was
to
be - a
keystone in r.the
U. S. A.'s postwar trade policy;
as
&
re-elected Presi¬
was
the
Leonard &
W.
K. Cunning¬
Treasurer of S.
and
for
it
to
comes
inence of Chase officers in official
& Co.
of
the
Chase, and because of other
dent
consideration
Mr.
new
of
from
ham
ing,
of
director
it
interna¬
policies
client
a
executive
-!
The argument against limiting
the World Bank's operations to its
to
S.
guar¬
Hard-Currency Limitation;
hard-currency capital
U.
money
~,
the
was
McCloy's law firm, since the
it.
Bank
MASS,
appoint the saiijfe
executive director of
man as
able.
Finally,
(Special to The Financial Chronicle).;
countries
Will there be underwriting
pressed disapproval.
BOSTON,
the
the largest quotas so deter¬
All that they would need
mined.
utive directors.
What
yield?
Hornblower
i,
institution^.
the position of organized
terms.
than
With Kidder, Peabody
*tro
saw
ington and abroad is that of loan
Auch and George L.
(Special to The Financial Chronicle)
Woods
Bretton
recalled,
will be able to continue with
only
intermittent presence of its exec¬
Building.
i
e$£ir
Fund
of the origin'al
the
it
program,
whicfi
are
of the
need for two separa e
White
for
Joins Westheimer & Co.
convinced that multiple
underwriting will become a
next
for¬
Lofgreen has been added to the
staff of Slayton & Co., Inc., 408
content of its garage.
the
were
All
(Special to The Financial Chronicle)
am
within
Inc.,
hopes it dangled before them will
give the Br..je a iair chance to
tional
survey, to
lic
Street.
with
Co.,
With Slayton Staff
which I referred earlier,
indicates that there is a
demand
Olive
now
&
merly with Slayton & Co.
tiplejine underwriting. The Roper
clearly
LOUIS,
are
To be
spects- are/poorer than those of,
say, Chile's case. ? France, it ~ is
ppinted, -out, t is accumulating11;a
rather staggering; debt load,-al¬
Opens
Own Investment Office
(Special to The Financial Chronicle)
complete solution to the problem
did consider that the report
offered a constructive start in the
solution of some of the problems
but
y
Kimbrough to Manage
Morton M. Banks
a
hrough the Bank'.
mcrr.beis, natably but hot
exclusively Latin Americans, who
joined the Bank because of thC
writer is told, the economic aspects
of the French loan in many re¬
000, and
assist!
available
Those
the "positive side is that of the
French loan application. That iS,
France will get a loan. "( But, the
Canada
been for t..e capital
not
ance
default record, which is really not
so
bad, or its leftish complexion?"
it
Property Floater Pol*pany /in, Canton and Rockland,
icies—Any fire,/ marine, cas?
Mass.' Total net sales for 'the fis^
.in
ualty or surety company should
cal year ended Nov. 30, 1946, were
; be empowered
to insure indi¬
DETROIT, MICH.
E, Price
viduals against all risks of loss $12,678,315 and net profit for the
period jwas $2,149,550.
For the Kimbrough has been appointed
of, or damage to, personal prop¬
manager of the bond department
fiscal quarter ended Feb. 28,1947,
erty other than: (a) motor ve¬
of the Detroit office of Merrill
net sales were estimated at $3,hicles, aircraft, or watercraft
Lynch, Pierce, Fenner & Beane,
771,OOd and net profit was esti¬ in the Buhl Building. Mr. Kim¬
< excepting
canoes,
rowboats,
sail-boats less than twenty-one mated at $741,000. The company's
brough has recently been serving
feet in
length, and outboard sole capitalization consists of 900,- with
the
Army Transportation
motor boats); or (b) personal
000 shares of common stock, $2 Corps in the South Pacific. Prior
property pertaining to the busi¬
to his enlistment, he was with
A dividend of 25 cents
ness, trade or profession of the par value.
Braun, Bosworth & Co., Miller,
insured (excepting professional per share is payable May 15, 1947,
Kenower & Co. and the Union
books, instruments and other to stockholders of record on April Guardian Trust Co.
professional equipment owned
30,1947.
'
by the insured).
The committee did not feel that
Will borrowers be chose-i
independently of the political pol¬
on
Bates manufactures a large va¬
Spotlight
•:.i; vvhic.i it stands,'had
Bank. it
incorporated
Aug. 16, These are among the questions
1850;
Bates
•//
Manufacturing Co. being asked.
now owns, directly or through its
What those friends of Bretton
Woods fear, of course, is that posubsidiary, five textile mills. The
itical considerations will dictate
Bates,
Androscoggin
and
Hill
Mills
are
located
at
Lewiston, Doth the making and the withMe.; the Edwards Mill is located lolding of World Bank loans. The
at Augusta, Me.; and the York number one political decision on
under
"
*
accept?
49
5)
page
weeKs.
the
are
outstanding and are ect of Poland be rejected because
Deing sold for the account of of Russia? Or will Chile be pushed
stockholders, and no proceeds will aside because of sneering at its
.
,
lew
shares
.
'
a
specific, will a well-organized and
economically promising loan proj¬
J. A. Hogle Opens N.
••
within
borrowers will
icies of the United States?
by E. H. Rollins & Sons, Inc.
was priced to the
pub¬
lic
at
$29.25 per share.
These
.»■
"
made
'Which
from
//^aircraft physical^
^pes; and cable insulations tapej
*; craft, liabiiity ;haKai^)
v^w^ coated fabrics and rubber bands.'
ever requirement is the higher.
Plants are operated by the com¬
5.- Personal
be
;o
(Continued from
ed
.
.
■''vV
The stock
licly April 1 300,000 shares cf
liability common stock
(par $2) of Ply¬ rayon fabrics produced by; the
arising out of ownership, main¬
are filament
rayon
mouth Rubber Co., Inc., at $13.50 company
tenance or use of automobiles,
cloths, primarily for garment lin¬
per share. The shares, which rep¬
provided such company meets
resent part of the holdings of a ings, underwear, dress goods and
the financial requirement which
home
furnishings,
and
goods
group
of
selling
stockholders,
must
be met by a company
were
oversubscribed
and
the woven from acetate and nylon
qualified to write automobile books closed.
yarns.
""
physical damage or automobile
The company, organized in Mas¬
liability hazards, whichever resachusetts in 1922, is > a leading
quirement is the higher.
manufacturer of plastic and rub¬
4. Aircraft Insurance—Any fire, or
ber specialties which are distrib¬
marine insurance coihpany, or
uted widely in this couptry and
any casualty or surety company
J; A. Hogle & Co.,-members of
also sold for export,. The plastic
*
licensed to write;liability in*
division, started in 1943, ig now the New York and Salt -Lake
surance should be • empowered
the,. company's most ?important, Stock Exchanges and other, prin^
to write insurance against any
iine. In addition to extruded prod* ripal exchanges; announce the
/; and "air pf the liazards of loss
:
ucts, this division makes plastic opening: ©f a branch Office at 61
from. damage /to aircraft, > or
film and .sheets* Which It sells as Broadway, New York City, under
irom; liability,;, arising; put of
such and also manufactures' into the management of Kenneth J.
ownership, maintenance , or use
Mr. Howard has been
shower^.. tmflairis,. .raincoats,1 baby Howard.
//.of airtraft $royide& such' coin?
pants, crib pads and other special¬ representative :for:J.; A. 'Hogte
pany meets'- the/financial.-re*
ties. Rubber products include rub- Co. in New York for the past year,
quirement which' must be met
berries ahd heels fptshoes; elec-? specializing, in Western mining
; ; by, a company, qualified to Write
trical, friction and rubber splicing issues'. ■-iVil-'l*
automobiles,
World Bank in the
Offered at $20.25 Share
Bates
(1829)
Co.
C.
and
Scott
&
elected
are
of McKelvey
Lear of Reed,
James M. Scott
Mr. Alex¬
British Con¬
Co.
ander Galbraith. the
sul in Pittsburgh, was the princi¬
affil^jtec
Co^fJ(15 but,many,c9,yptries would not have ' pal speaker at the dinner which
h-.iriness session.
gC£gpted;$^Fund and the trade) followed the business session,,
50
THE COMMERCIAL & FINANCIAL CHRONICLE
(1830)
An Indictment
Pieck, the Chairman
; ;
this of that meeting, or of that Con¬
(Continued from page 16)
of
deceit
further,
and
that
entire method of procedure
gress, who
resentative
is
far
tion of the intellect. So that every¬
who
one
himself
calls
"What
Com¬
a
is
now
What
is merely a manikin, being moved
about at the direction of the dic¬
banner of Marx,
Stalin.
tators
where?
But, more important than all of
this background indictment is the
fact
that
today, Soviet Russia
aims, through
destruction
the
of nerves, at
a war
the American
of
is
banner?
our
It
is
Who is our leader every¬
It is Stalin."
moral
chief
the
as
obstacle in its path to world do¬
mination, thereby, of course, pav¬
ing the way for the destruction of
all organized religion.
Because,
Pius
XI
in
says,
Encyclical
on
his remarkable
Atheistic
Com¬
munism:
A
system
Statism
foundation
of
based
which
on
has
that
than
terror,
other
no
low
the
terror, cannot permit moral
confines; cannot permit the
idea of
morality through
ural Law
remain
This
a Nat¬
the idea of God to
or
within
is
a
its regime.
serious
most
indict¬
ment, I appreciate, but as I have
said, it is supported by the charges
which I have learned to bring be¬
fore you from my own, reluctant
and
bitter, experience. Item by
item, let us consider them.
In the first place, Soviet Russia's
intention
That
I
to
dominate the
stated
than
more
when I left the
ago
year
Communist
It is much
movement.
world.
a
more
lucid
now, because we have just had
this machine-g(in election in Po¬
land.
And the terror in Roumania
and
Bulgaria, reported by Reuben
Markham of the "Chistian Science
Monitor,"
the
complete
tion of the Four
destruc¬
Freedoms,
every¬
their leader
as
adopted
by the Communist leaders from
throughout the World.
This
resolution
all
under
declared
circumstances
that
would
for any preserva¬
garia, in Roumania and Poland,
j
But we can go, as far as the
objective of world domination is
concerned, to the Soviet leaders
themselves.
We have statements
which I have quoted before.
V
M. Molotov, present Foreign Min¬
ister of Soviet
Russia, in 1928
told
this
to
the
ian
Dictatorship,
Communism.
This
was
to
Universal
•
to
synonymous
any
pledge any field marshal ever
made to Hitler as the leader of the
Reich.
It was subscribed to by
the American Communist leaders
enthusiastically,
and
by Earl Browder,
as
These,
by
chosen
at
the
have been
these various
way,
random,
quotations.
*
Molotov
the
Sixth
stated
at
the
time
of
Congress of the Com¬
munist Internationale: What is the
sole purpose and goal of the Com¬
munist
Internationale?
answered:
goal
of
The
sole
And
purpose
he
and
the
Communist Interna¬
tionale is the establishment of a
World
Proletarian
Dictatorship.
He
not
only said this once. He
said it fully ten times in this ad¬
dress, which
can
be
cidentally, from the
V New
obtained, in¬
files
of
the
York Public
Library, and at
a
very nominal sum, I am sure, by
having it photostated.
>It
appears
in the
International
Press Correspondence for
1928,
that being the reportorial
system
of the Communist Internationale
at that time.
.
v,v.;'
In 1935, there occurred the Peo¬
ples' Front Congress, and another
tone might have been
expected.
But the
same idea of world domi¬
nation continues to prevail in that
Congress. This was a meeting of
all the Communist leaders
from
again,
throughout
the world, to
receive instructions as to the
poli¬
cies to pursue in the
ensuing pe¬
riod.
represented at that time,
Communists
and
their
rather
was a
occurrence
the
on
un¬
of
Communist leadership. My friends,
it
is
part
common
a
pattern of such
leadership. Charles Krumbein who
specifically
the then head
for
Soviet
any
leader
in
the
by
Union, approved
dictatorship.
the
To the
contrary, its
will
you
false passport.
were even more
Soviet
Russia
the
made
United
my
an
States
liar
operate,
United
Nations.
States contended
to
and
The
-
the
peoples'
terms. And
animus
Mates
in
against
many
can any—
allegedly
—-
power
attack
—
stantly
en¬
is
reaches
United
official
when
from
friendly
being carried
the
in
&
the
a pecu¬
the
quarters,
campaign
organized
Moscow
on
con¬
word
that
Communist Party
a
specific directive to
them as to how to act.
has led, of course—the
fact
deavoring to bring Argentina into
the
into
this
mind
for
"
world, there is apparently
to open fire on
regard to the whol*
vividly in
'
.that' throughout
Argentine and other matters.. So
lin's business
Harry Ganngs, late foreign editor
on the "Daily
Worker," was about
to
be
imprisoned on the same
charge as Browder when he died,
'
more laucous
recall,
Stettinius in
upon
a
they
taking place in
Francisco, and we received
instructions, when D. Z. Manuil¬
sky arrived late on the scene, as
on
on
"
—
organizations, into the Press they
influence, it comes out in much
tention the battle
ling to the Orient
Krem¬
—-1
but
San
that it is very
the
vividly because,
very
expressed in "New Times"
scientific, ideological language,
t_-.A
when it is transferred
to the
Communist ranks in
every coun¬
try, mto the trade unions where
as
Treasurer, spent
eighteen months in jail for travel¬
the National
was
leader
every
as
,
United
this would lead
unanimity in Latin America that the
Communist movement is
was
desirable, and won its ! such a
puppet of the Kremlin in
point,
but
munists,
and
thereafter
as
those
you
the
Com¬
the carrying out of
this campaign
—-has led to the absolute destruc¬
know very well,
whom
they were able tion of all intellectual
integrity on.
influence, conducted a barrage, the part of anyone who
wishes, to
campaign everywhere through¬ be an adherent of
Communism," in.
Oh, the number of these names, out this country against Argen¬ any
leading degree. It is very
which would not mean so very tina, so that a policy of
bearing ironical that in the
viewpoint of
much just in the naming, can be down upon Argentina was
inaug¬ Marxism, which claims to have
mounted up until they become urated.
Immediately the Com¬ established a science that
brought
quite a considerable lot. And then. munists in Latin America took about the
triumph of the intellect
during the Hitler-Stalin Pact, I advantage of this to open fire in: by
doing away with all
lin's desires.
found that
wide
so
to
a
.
were
the tech¬
nical
difficulties, false entries in¬
to the United States, false
or leader of the American
pass¬
delega¬
ports, other things to haunt the
tion.
footsteps of Communist leaders
Let us go further into the sec¬
here, that practically all of them
ond feature
of this indictment.
had to go underground. That was
What part did the
Communist at the
time that the Party was in
party play in this aim at world
disrepute because of its forward¬
domination? There, we can bring
ing the ideas of Hitler, as you will
forth evidence upon
evidence, but recall, declaring Hitler to be the
I will content myself
calling your Evangel of
Peace, and Britain to
attention to the fact that through¬
be the chief enemy of mankind.
out twenty-five years of its ex¬
They went to Florida, put on false
istence, never has the Commu¬
moustachios—did
all
sorts
of
nist partjMn any
resolution, nor things. They even tried to
get me
the Communist Press, in
any of to
go underground; to go to a
its pages, expressed one word of
hotel, to put down my name un¬
criticism
der some assumed
cognomen,
but
1 refused to do so, saying: "What's
the matter with me?
There is
pages re¬
sorts
atin
America upon Yankee Im¬
and
its
interference
with the affairs of another coun¬
of
spiritual underbrush, spiritual or
considerations that
keep
the intellect from
expressing it¬
perialism
moral
try, and as a result the Commu-* self
fully—that this has ended in
nists have gained
tremendously in the complete destruction of the
neighboring
Chile;:, many
new intellect. What
intellect is allowed
members in the Parliament, and a
Communist leader? I will give
three
members in the Chilean you one or two
examples.
'
?
cabinet.
^
We will take the intellect of
Earl Browder. What
happened to
it?
v
And
then, when all of this was
horoughly done, Soviet Russia's
b
oreign
Department
makes
a
Well, Earl Browder was the
treaty with Argentina, a
eader, chosen personally by Josef
trade treaty and declares itself a
Stalm to represent him in Amer¬
friend of the Argentine
people. I ica when
Jay Lovestone and Gitsubmit that this is deceit.
special
ow were
Then, in
regard
to
the
treat¬
Stalin
ment of the German
thrown out in Moscow,
by
himself—personally. Brow¬
people. I had der, therefore, every time he
ap¬
bought that this war was fought peared before a secret
national
the principle no people were
committee
meeting, had 40 be
to be stamped as
criminal, and cheered for at least one half 'hour
over
nothing wrong with me." .And
yet the Communists began a cam¬ to one hour. Of
they were very much surprised to
course, on a pub¬
paign to destroy the German peo¬ lic platform we
leadership of find that there was one leading
respect leadership.
ple, Not the Nazi leaders alone,
the Soviet State, no matter what
Sure, that's correct, if you -agree
Communist, or two, who had. no but
the
entire
German
actions they may pursue, no mat¬
peo¬ with it, but this was in
"technical difficulties"
as
pdvatel
they
ter what policies they
ple. The Soviet armies and the secret
may adopt. called it; who had committed no
meetings. You had to arisei
Soviet Union compelled Czecho¬ whether
On the contrary, every American
offense against the Government
you wanted
to or not,
Of all
praises, with adulation
those
in the
leader
is weighed and measured
accordance to the degree of his
m
friendship
Soviet
or
State.
"opposition,"
the
subservience to the
If he is at all in
he
is
flow
utmost
of
subjected to
vituperation,
matter who he may be.
A^^L iL w© had the
no
Leningrad func¬
tionaries of the Communist party
after the Sixth World
Congress
was
the
they look to the leadership of Sta¬
extensive: to Paris, Latin America,
as their teacher, their
leader,
to the Philippines—on false pass¬
their guide; as the one who would
lead them to the World Proletar¬ ports to carry forward the Krem¬
sound with
one measure
It
by
lin
Kremlin
in
States
I
managing editor of the "Daily
Worker," I watched with great at¬
and his activities
put its heel.
; And
there cannot be any more
pretext, that Soviet Russia stands
.
was
United
member it
usual
Stalin
general¬
for that offense.
of the Ukraine in the United Na¬
where that the Red Army dares to
tion of the Four Freedoms, after
its conduct in
Yugoslavia, Bul-
the
to
in
~
was this man
that man, and he went to jail
friends, that this
considerations to remain within
its
known
more
tions, who is in reality still the
Nation, and the American Repub¬ dead of Communist
Internationale,
as the chief physical obstacle
arise then, in 1935 and add much
in its
path to world domination, more
extensively to this vision of
and that, secondly, it aims at the
world domination, but a special
complete destruction of the Cath¬ resolution of
personal feeling for
Church
ly
activities, which could be reen^4-U^.v.^.
forced by many others.
We'll take the case of Argentina.
We remember Argentina.
I re¬
a
or
emphatic, not only did D. V.
Manuilsky, alleged respresentative
lic
olic
instance, Nicholas Dannenberg,
Government; that he
Engel, Lenin and
And in order to make this
the representation that he was
another person; that he was, for
secret Soviet agent not so
the
,
Government, into Russia and to
other places, particularly
China,
on
is the
It
goal of Soviet power everywhere.
munist leader in the United States
residing in the Kremlin.
goal?
our
.
passports. At the time of the Hit¬
ler-Stalin Pact, he had travelled,
in defiance of the United States
the chief rep¬
of the Comintern, of
as inose acting for Soviet Russia
the Kremlin, in Soviet-occupied
are concerned, leads to me most
intense aegrauation of intellectual
regions of Germany—in his speech
integrity; the complete atomiza- as Chairman, stated:
so
will come out in more detail, as"
ing a campaign against the
United
;the> .days .go by..,,.,
:
;.v ^States
that certainly shouldn't
^Iii fegard to the deceit; of
course;', come from any
friendly power,
this is the common pattern of
declaring us a greedy nation
Communists, and I will not be- which has
planned for the starvalabor your time with
mentioning tion of all other
peoples in order
it in detail. I will
only give you to be able to
subjugate them to
two examples from out of the
American domination.
Soviet Government's own public 1
This is
|of Soviet Policies
Wilhelm
Thursday, April 3, 1947
time,
we
of the United
It
largely because of that
was
that I
States,
slovakia to drive 14 million peo¬
ple, men, women and children, in
the cold, in the midst of a winter,
elevated to the presir out of their
homes, which they
dency of the corporation controls had
occupied for several hundreds
ling the "Daily Worker" during of
years, into the American Zone
that time, and to the
managing in
Germany, roof less — without
editorship of the "Daily Worker/ clothes on their
backs, in many
was
Illegal activity I will not go in¬ instances.
And
to, in the sense of the methods of
here, too, there was
assassination carried on
as a very
by the regular campaign conducted by
outstanding example of
secret
the Communists and their friends
conspiratorial
just this course of action.
apparatus,
save to
point out that as an edi¬ everywhere possible for bearing
And that, my
friends, is the torial worker on
the
"Daily down up the German people. And
.°t a Quisling movement, Worker" I
sought to get the when this thing was thoroughly
which is reenforced
very much by
answers
to
the
the whole conduct and
charges
in done, so far as it could be, Mr.
attitude of
regard
to
the
the Communist leaders.
disappearance Molotov arises and, in effect, de¬
of
Julia
S tuar t
Poyntz, for clares that Soviet Russia does not
What does the Communist lead¬
example, a native American approve of bad treatment for the
er
have to do?
Every morning school teacher
long in the ranks of German people. And Mr. Byrnes
study——not what American leader¬ the
Communists, who was very ac¬ has to rush to Stuttgart and say,
ship is saying, but what Pravda tive in
the secret apparatus of the "Neither do we!"
says, or Izvestia, the Soviet PressCommunist
could
study the
Communist at¬
titude toward President Roosevelt
what
the
Soviet
leaders
are
de¬
claring, in order to learn how best
he can that day and
throughout
the
country
in
his
work
carry
forward the will of Moscow
among
American people,
the
it
as
expressing
far
terms,
people,
as
possible in American
order to deceive the
in
v
who
the
has
never
been heard from since
The
"Daily Worker" was accused
knowing something in regard to
of
this
to
disappearance,
make
no
a
and I wished
defense.
I
the
.Then this is carried forward
the most
involve
some
comrades, and the
soon forget
it."
It
case
in
was
the
Ignatz
the
secret
devices.
You will recall that Earl Brow¬
der went to jail for
falsifying his
"■>
:)..■
sninbiri bm s?'
I
cargo
of our
wil
thing
Maria
apparatus
wished
to
in
the
make
—
kid¬
abou
a
de
the same reply
And this story can
go very muc
further, indeed, than I
today.
a
short-hand account of
.
after Browder had given a
report from two to four hours at
tee,
National
a,
Committee
Committee, 60 in
I
am
can
sure
turn, and say that
he agreed 100% with
the magnify
lcfF1. report of Comrade Browder
anything that
whicn transcended
his
genius ever before had con¬
cocted, and they hailed him as the
leading Marxist of the Western
Hemisphere,
was
.
is
very
and
the
adulation
thick, indeed.
The reason for this,
very apparent.
honoring
Earl
of
course
They weren't
Browder
wfcW
many of them had the utmost con-
deceit.
Earl Browder
Josef
They
Stalin
mine the
were
honoring
whose
depository
happened to be.'
5
prestige and position of
1 kope that I have
made this
States throughout the
properly clear. Although if
your
world.
read Hie
Birthday Edition alwufc
This is reenforced today in the
^ "The
"New Times," the "New Times" which was then
the official the¬
being the current name of the oretical organ, you would
imagine
Communist Internationale maga¬ they were
speaking about Stalin
zine.
Every trained Communist instead of
Browder, so great were
knows it. It is issued as a special
the United
Communist;'?
wMlder
behalf^H that Were sung
union
w
fear
to the Soviet trade
magazine, "Trud," in
That, I, as managing
editor of the "Daily Worker," Ear
Browder, then general secretary,
and
every
other leading Com¬
munist, knew and knows—tha
"New
Times"
is
the
Commu¬
A
or
on hi*
WasL a man -without
reproach,
whatsoever.
or
But one
any.defect
day sudden-
^'ln^pril
1945, Jacques DuCommn6- I^ °f an
the French
Communists, wrote
article
5eclared.
euiltv of
Browder
guilty of Revisionism
in
to be
,
give it
nist-Internationale
in
disguise,
that
and
Times"
is
conduct-
it
all
would arise in
tempt for.
Deceit intended to under¬
meeting,
stating what would be policy for
the next period,
every member of
the National
affair, but that is what took
place.
And that, I submit, is
Reiss, also Moscow.
fense—received
to t you
This is
the
Beyond that—this was only* sL
sign of what was to follow.
Every
member of the National
Commit¬
supplement
same
of
whom
make
people
in napped, killed and, again,
illegal manner, with re¬
sort to all sorts of
illegal contriv¬
told
was
definitely that we will
defense; that this is hot
—"it might
putting in¬
to effect the current will
of
masters of the Kremlin.
was
they call it
disappeared completely from
sidewalks of New York, and
very
can exercise it in
ances and
and
.
That is the constant
preoccupa¬
tion of Communist leaders in this
country, without one degree of
individual
initiative
insofar
as
they
movement;
about to "go sour," as
and cheer him to the
echo. 7
"New
iJf r/°U aknow what Revisionism
14
cnme from
IS
the
Right,
.
against
of "treason
crime
a
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4582
165
Volume
the
Soviet Union &hd the Communist
the
from
movement
Right.
It
is
somewhat similar, or corresponds
Trotzkyism is in the
to what
Of
dnme from the Left.
a
way
And at
fended
the
Pact.
Teheran
:
The
Pact, the agreement be¬
tween
Stalin,"
Roosevelt
and
Churchill which said they would
TehCran
generations
cooperate for future
of
peace.
'
^
j .-ivv..
.
him
few
a
the
in
converts
build up the
order
to
which is the same tactic as Hitler
Catholic Church, in
adopted,Except with Soviet vari¬
ations.
not
51
to
endeavors
Wall
of
Street
against
Moscow.
that
American Protestants and
our
(1831)
fellow citizens
But
are
I
am
sure
not going to be
v
,
III and I do raise the question as
whether the time to stop it is
and
now,
to whether the
as
This I saw, my friends, as early
as 1943. I saw it in the changes in
stop it is not
concerning this complete denial of
tactics in regard to Finland.
free
You
place in
which
elections
to
in
these nations
to
policy; deeply moved by this activity. will remember the efforts of which I have referred.
V
meeting, which was held in June, popularized it in America, as the Nevertheless, the Comrades now Soviet Russia: Finland was to be
I feel confident that America
a Red Republic. That was not suc¬
Kremlin at that time wished it to understand
that,
disguised
as
1945, a secret irie6ting at which
has a great mission to the World
Browder was to state his case un¬ be done. But- Jacques Duclos said Protestants they are to go forth, cessful, and from that time on it today, and that the chief of its
der this accusation, these mem¬ then, in his article, that the Te¬ just as they have been alleged was decided to follow the Hitler
contributions can be the bringing
bers of the National Committee heran Pact is only a diplomatic Liberals and trade unionists and tactic which was always near at about of a just and
lasting peace,
i to
arouse
America hand for the Soviet Dictator, but
who fahd cheered him and adu¬ document, arid that Browder is endeavor
by taking a firm stand against ap¬
lated and approved of him were guilty of Revisionism in trying to against the Catholic Church. And definitely f:to follow the Hitlerite peasement; by taking a firm stand
tactic in Latvia, Estonia, Lithuania,
for democratic elements through¬
now—they wouldn't even speak to extend it to a lengthy friendship they, state speCifically—this is in
National
first
the
This
him.
utterecF-
he
had
yet in his
before
own
was
word
a
Committee
defense.
But wasn't that
*
Of
on
that
the
United States.
that the laity must be divided
froth the■■■ hierarchy,* and as *a
Only a diplomatic document. In
other words, only a piece of dust
to be thrown in the face of the
Frenchman in Paris?
American
American
a
course
stood
between the Soviet Union and the
Browder had sealed his
by
away,
powerful doc¬
a
written hundreds of miles
ument
Browder
Executive
people
and
the
in order that
lend-lease into
before the ef¬
warrant when he had they
will pour
introducing this article Russia, stricken
ficient German war machine. That
finally, after much hesitancy, he
had
written
this
significant is what Mr.vDuelo's words said,
phrase: "This undoubtedly rep¬ and I invite .you-to study them
resents the opinion of all leading carefully, and jto.be reminded of
That is
European Marxists." That is, that their full significance.
he was a traitor. Represented the what they meant to a trained
opinion of all leading European Communist, and that is what they
own
death
written,
Marxists, said he. Well, everyone
knew—you didn't have to be very
grownup to know
that the leading
European Marxist is Josef Stalin
iLQur leader,
our teacher, our
guide, and if Sail the leading
European
Marxists agree with
this judgment, that was the judg¬
ment of the dictators
in the Krem-
X, That is why Mr. Browder was
Socially ostracized at the first ap¬
pearance he made in the National
this
after
Committee
document
Vvas released.
2 1
was
of three who spoke
one
|o him, and I had
particular
ex¬
to
be able to speak to enemies of the
Party, because I had said, "How
emption
in
the
as
a
newspaperman
a
world
can
I
go
to
press
tables and other places as a news¬
and make faces at peo¬
ple with whom I have tb cooper¬
paperman,
ate"—-and
I
given
was
a
special
exemption by which I could speak
to enemies of the Party.
'
Ironically, I took that exemption
to speak to Earl Browder on that
June morning when the majority
6f the 60 members of the National
Committee present would not ad¬
dress him any more.
Now, why was Browder sig¬
nalled out, we may ask. Why was
jhe
signalled out for this treat¬
ment, when he had been so subsen lent to the Kremlin? He had
jgott » to China as the representa¬
tive of Stalin, and had organized
Reds
Chinese
the
American nation.
against
That
was
the
speci¬
fically said to be the
his
mission
that
at
purpose of
time.
With
Thomas Mann, Jacques Doriot of
France, he had done a good job
there, and that id why he was
elevated to the leadership of the
American organization. Here he
had
likewise
been
subservient,
sometimes, to an almost
absurd degree, carrying put every
order* minutely
and
justifying
every conclusion reached by Moeow as quickly as he could.
even,
"
Why
he signalled out for
was
this
particularly
ignominious
treatment?
Because a conspiracy
"We are about
War of Nerves against
to unleash
a
say
from .which we
wish to borrow money in order
the United States,
tb attack
the'United States
more/'
once
-
j~rAhd' to: 'every trained Commu¬
nist it is well understood that Mr.
Brdwder Was so demoted without
Warning,' in the fashion he was,
4hi!order that everywhere,
throughout the world, the leading
Communists
would
appreciate
that from this time on, the United
States is the chief foe, and a War
of Nerves is about to be unleashed
against the American nation.
cause
Browder
international
ment as
Kremlin
a
man
line
stood
out
Communist
in
Be¬
the
move¬
who, following the
at
that
time,
de¬
recent
City
give
a
resolution
Council
councilman
Spellman.
can
well be
model
in
in the
New
York
elections,
ever
since, everywhere the Red Army
has entered
any country under
any guise. This has to be stopped,
unless We
are
to have World War
the
out
world, and by taking
a
firm stand for those things which
were
promised out of this Bloody
Conflict, the Triumph of the Four
Freedoms.
.
by the Communist
attacking
Cardinal
■
This should be repeated
.
\
Federal Reserve Board Clarifies Reasons
every¬
For
where that it is feasible, feasible
of course, to
"Jah"
be done, and this is
the Communist tactic which they
recommend
throughout America.
It is interesting that the charges
Backing Bank-Loan Bill
(Continued from
v
Owners
of
small
enterprises
characteristically prefer to obtain
15)
page
financing.
lected
,
*
.
:
Interest and fees
exceeded
col¬
and
expenses
.
From
.
|;
April 26 to May 4
.
oncile
and
they
95%
is what is occurring
Polish Fair to Run
perience in my endeavor to rec¬
Molotov
done
getting
—
where, saying "Kilroy
here."
-A Conspiracy does not arise in the
United Nations, in the person of a
sample of how this
of
which
against Cardinal Spellman were their funds on a loan rather than losses.
meant to the entire National Com¬
precisely the same as those that an equity basis, because they do
They point out that during the
mittee of the Communist party of have
so
infamously sent Arch¬ not wish to permit a dilution of war the Federal Reserve
System
the United States, well-trained in bishop Stepinac of Yugoslavia to their own interests or to run the
acquired valuable experience in
deciphering such messages.
jail, in hard labor, in Tito's prison risk; of losing control of their the administration of the V-loan
Were time to permit, I'd like camps
businesses. For this purpose term
program
for
guaranteeing
war
to go into this Duclos article in
There,
in
some
fragmentary loans, amortized out of profits, are production loans. Under that pro¬
which
it
was
shown
that
the
essential and desirable. This type
gram they processed 8,771 guar¬
form* is some of the story that
United States was a hopelessly
of financing is particularly suit¬
could tell.
Or, part of the ex¬
antees, aggregating nearly $10 Vz
able for small businesses, which billion.
capitalistic nation, in the light of
The guarantee fees col¬
perience that came to me. It is
the Duclos article, which meant,
need a substantial period of time lected far
much more intense than I can give
exceeded expenses and
to retire loans by gradual repay¬ losses
incidentally,
that
the
United
sustained and the opera¬
you in our few moments together
States as a hopelessly capitalistic
ment from earnings.
tion resulted in a very substan¬
today, but this thing is clear: That,
nation
would have
to
receive, as 1 stated at the
tial profit
for the government.
time, the
Operating Procedure
eventually, the same treatment Dictators in control of the Krem¬
The pending bill follows the guar¬
that
The Reserve
Board maintains antee
Germany,
the
hopelessly lin are intent upon a War of
principle which was applied
Facist nation, received.
that the bill does not place the under
that program, and financ¬
Nerves against the United States;
All this is borne home to my
Reserve
Banks
in
competition ing institutions are already fa¬
upon
pushing
forward
across
with the private banking system. miliar with
memory .well, because it was a
the services of the
Europe and Asia, to confront our
three weeks' discussion, of which
Loans guaranteed
would origi¬ Reserve Banks in that field.
nation with these two continents
I was chairman,, just before I left
nate with local banks dealing with
and to engage, if necessary, in
local
the organization—already prepar¬
people whom they know
military conflict.
Just as this
ing to go for a long period of time year, we see the Four Freedoms, and with whose character, cap¬
and this viewpoint was en¬
ability and capacity they would
as I have stated, so notoriously de¬
be familiar.
A Federal Reserve
dorsed by the then representative
stroyed in Poland, Bulgaria, and
of the Communist Internationale,
Bank would,,not guarantee anv
Rountanfa—not to mention Yugo¬
loan unless requested by the local
Gerhardt Eisler; otherwise known
WASHINGTON—The
Interna¬
slavia — so we shall see, in the
as Hans Berger.
next year, unless a firm policy is bank; but if such a guarantee is tional Fair of Poznan, Poland, in¬
desired
it
would
be
promptly terrupted by the war after 18 years
And in order to confirm this, taken
by our Government against
in
August last year,
Eugene this constant destruction of Liber¬ available, when approved by the of existence, will take place—for
Reserve Bank, without referring the first time in the
Tarle, the Soviet historian, in an ty by Soviet Russia, we will see
postwar pe¬
matter
to
any
agency
in riod—from April 26 to May
article in the "Bed Star," declared the advance of Soviet Russia to the
4,
Washington. The 12 Federal Re¬ 1947, the Polish Embassy has an¬
the United States to be a Fascist the borders of
Europe, into France
serve Banks and their 24 branches
nounced. It added that "the Fair
nation, comparing it somewhat to where
already
the
Communist
provide a regional organization this year will be especially in¬
Hitlerite Germany. Ann O'Hare
party is very strong, basing its
through which local financing in¬ teresting, as it will reflect the
McCormick answered that in the program, likewise, on a policy of
stitutions in all areas of the coun¬
New York "Times," but that didn't the utmost deceit.
progress already made lp Poland's
try would have convenient access postwar reconstruction^ The Fair
phase the Communists at all.
That being so, what should we to a
guaranteeing agency.
will
offer
foreign firms many
The British Communists, through do? I cannot venture to give rec¬
As in the case of war produc¬ opportunities for commercial and
their
National
Committee,
in ommendations to you today, but
tion loans under the V-loan pro¬ business
trade, with especially
September adopted a resolution one thing I am sure of, and that
wide possibilities in the sale of
again declaring the United States is that the appeasement of Soviet gram, a maximum interest rate
would be set for guaranteed loans. industrial articles.:
; ,; J
to be a Fascfst nation, and I re¬ Russia in any form will be more
The present maximum rate under
"Exhibitors and "visitors to the
disastrous for the United States
peat, if you read the characteriza
section 13b is 5 % and it is con¬ Poznan Fair will find comfortable
tions of United States policies as than
was
even
appeasement of
templated that the initial maxi¬ lodgings at the city's Gospoda
appearing in.i'New Times," and Hitlerite Germany.
mum rate under the new legisla¬
Targowa, Poland's largest tourist
regularly sent as directives to all
Secondly, and this I raise ohty tion would be the same. Within
hotel.
the Communist party throughout
..
•
as a question, Why is it not pos¬
this limit, which may be subject
the world, you will find that the sible
"Persons interested in attending
to raise on the floor of the
to change with changing condi¬
United States, with its Imperial
the International Fair of Poznan
United Nations at last the question
tions, interest rates would be de¬ can receive visas
ism so-called now, in the eyes of of
by applying to
the maiming and murder of the
termined by the borrower and
the Soviet and its Fifth Columns, Four Freedoms in
the nearest Polish consulate."
Poland, Bulga¬ the bank.
is almost, if not precisely, in the
ria, Roumania and Yugoslavia?
Guarantee fees charged would
same
position as Hitlerite Ger¬ Soviet Russia certainly has no
many's relation to Soviet Russia qualms about raising any question be specified percentages of the in¬ New York Stock Exchange
a few years back.
on
its mind on the floor of the terest rate, graduated according to
Weekly Firm Changes
There was, likewise, the attack United Nations, almost even hav¬ the percentage of the loan guar¬
The New York Stock Exchange
anteed.
The method would be
upon the Catholic Church, which ing this recent hold-up brbught on
has announced the following firm
I learned about from bitter ex¬ the floor of the United Nations. similar to that used in the V-loan
does hot leave signs around every¬
was
April, 1946 "Political Affairs"
nism.
Catholicism
and
Commu¬
That is too long a story to
when
guarantee
fees changes:
But
program,
Poland
ranged from 10 to 30% of the in¬
terest rate, according to the per¬
centage of the guarantee.
certainly today, in the case of
we have, as the New York
"Times" indicated it, reached
point where, unless something is
done, Soviet Russia will be the
Precedents for Guaranteeing
mas t e r
of
Europe
periences ai^^bhfirmcd. The at¬ complete
The (Federal Reserve author¬
the
tack on the Vatican has increased whether
Eurpoean
people
with fury, but here in the United want it or not. And I do raise as ities firmly maintain that the sys¬
a
question—not knowing all the tem of providing financial assist¬
States, in April, 1946, in "Political
ance
through partial guarantees
Affairs," the official communist facts in the case—if it is not ad¬
theoretical organ, those charges visable at the moment that the of loans no longer involves un¬
tried principles and procedures.
which I made the year before, in question be raised as to why the
this respect, and which I knew Four Freedoms are being destroy¬ For many years the Federal Re¬
to be true from my experience, ed, and free elections being wiped serve System has had experience
out in these countries which, in in making and guaranteeing busi¬
are openly acknowledged.
my mind, from other information ness loans under section 13b of
Namely, it is set out that there
Federal
Reserve
Act.
Al¬
that I have received over my desk, the
must be a campaign for the de¬
though the authority of the Fed¬
are the nesting places for the next
struction of The Catholic Church
eral Reserve Banks under that
World War—should it come. The
in America. This is to be done by
nesting places, because* hundreds section was restricted, they ap¬
arousing the Protestants to the in¬
of thousands of conscripted sol¬ proved 3,542 applications for com¬
creasing influence and growth of
diers are being trained there even¬ mitments and advances amount¬
the Church. As a matter of fact,
tually bv Soviet Russia for its ing to $566,000,000, and their per¬
Monsignor Sheen is accused of be
sonnel, gained lsl: fund of knowl¬
ing in cahoots with Capitalism, services in the conquest of other
and the Capitalists are throwing I nations, through the Blitzkrieg, edge and training in this type of
tell you today, but I will say that,
again, in "New Times," all my ex
Transfer of the
bership
of
Exchange mem¬
Harold R. Colvin to
Albert D. Farwell will be consid¬
ered by the Exchange on
Mr.
Farwell
will
April 10.
continue
as
a
general partner of Farwell, Chap¬
man
& Co.
< v
'
•'
"
Luber & Co. dissolved Man 31.
Walter
S.
Fahnestock
Aagaard,
& Co. died
partner in
on
March
24th, his interest in the firm ceas¬
ing as of the same date.
Percy Owen, Jr., member of the
Exchange, with¬
New York Stock
on
partnership in S. R.
& Co. on March 31,
which date the firm retired as
a
New
drew
from
Livingstone
York
member firm.
Allan
W.
Stock
Exchange
;
Betts withdrew from
partnership in Silberberg & Co.
on
March 31.
52
THE COMMERCIAL & FINANCIAL CHRONICLE
(1832)
Neither do I know what the
Tomorrow's
will
direction
next
be
once
carried.
This is not
and it is
lible.
by
But
no
it
a
system,
infal¬
means
has
its
advan¬
"something" occurs.
I tages, particularly in a dull
a
suspicion, however, market that is groping for
that the next major move will something.
#
be up. Before that happens I
the
Markets
Walter
know.
don't
I
is
it
what
have
Whyte
■Says—
=~By WALTER WHYTE=
Last week I mentioned two
also believe that we will see a
last most of
period of dullness that will stocks that show better than
April, and during average performance, Beth¬
that time prices will kind of lehem and U. S. Steel. At this
Continued dullness for rest of
drift down to. about the 170 writing their action is still
April indicated. Participation
In current market on a hit figure. It may stop short of it encouraging. But now with
by a couple of points, f But prices groping down it might
and run basis.
from this vantage point'the be a good idea to place some
If you're tired of reading 170 price appears to be the buying orders. I suggest Beth¬
lehem between 87 and 89
about
this
market, then objective.
with a stop at 86. U. S. Steel
>/
*
*
*
v
imagine how much more tire¬
is suggested.between 68 and
some it is to write about it.
Timing in the - next few
69 with a stop at 67. I don't
After all here is a market ly¬ weeks will be
quite impor¬
ing on its side. Every time it tant, not that it isn't impor¬ know how long you may have
stirs
everybody around it tant at all times, but buyers in to wait before you get either
of them. But
starts buzzing with ponder¬ the next few
you'll have to
weeks, if they
'
Caffrey to Push (or Disclosure and
Proxy Requirements to Unlisteds
(Continued from page 6)
,
statements about what it
ous
will do,
shift its
don't have the
and all it does is just Job,
position slightly and both
continue to
No wonder
snore.
will
in
There is
the market is losing friends. one's
After all how unsocial
lose
sleep
patience of a
considerable
and money.
nothing
nerves
as
transactions in the
stocks of their companies and to
pay over to the companies any
short-term capital gains in such
feels.
stock."
thinks.
Says the Committee—and this
is the point of interest here now—
"as these proposals (the two pro¬
posals mentioned in the paragraph
above) are not currently being
pressed, so far as this Committee
is aware, no further discussion of
them
necessary at this
Committee, however,
to register its opposition
them in case they should be
during a < dull
get and still keep even its market. To buy them right on
acquaintances. Even the bears the nose is an ideal everybody
who see in the present leth¬ in the market strives for. To
argy a sure indication of attain it is something else. If
sleeping sickness (encephalit¬ by chance one does manage
is lethargicus — if you're
to do it, it is usually a result
scientific) are slowly losing of a combination of
factors, in
interest. But whether or not which sheer luck plays a
—Walter
[The
article
position of the major part. I'm not denying
market is to your liking or that skill has something to do
not, you'll probably have to with it. But that skill has to
resign yourself to seeing it do with something based on
behave that way for the next
experience and that kind of
few weeks.
The only thing
experience
doesn't
include
that
can
another is
and
it
move
one
way or
kind of a jolt,
some
this
where
will
come
picking tops or bottoms,.
its broader sense,
skill
Whyte
views
do
not
expressed
in
necessarily at
*
;
*
Two
weeks
ning to show
an
sition
and
about
178
there
it
trouble.
po¬
rally
to
a
than
more
But
Wilbert Olsen V.-P.
into
run
piece of
a
prise news would
higher. Well, that
a
to limit a
Mr..
Of J. J. O'Connor
&
large
much
was
it
*
More often
limited. Profits
a
bet¬
increasing.
*
bert
.Wilbert O. Olsen
•
Street,
O.
has
become
their firm
with
ciated
President. Mr. Olsen
with
that Wil¬
announce
Olsen
Kneeland
&
as
was
Co.
asso¬
Vice-
formerly
for
many
in charge of the Municipal
Department. .
-
years,
like they might go higher, the
the
and back it went to about 177.
reached. But with each order
a
*
,vr
*;
limit must also be
*
a
der
placed. If
short sale there must be
stop
on
on top, with a
bottom. If it's
buy or¬
a
buy a
That the market is
,
for
waiting specific price must also be
something, I'm sure. But given with another figure un¬
der the buy, point beyond
which
the
stock
will not be
Pacific Coast
Established
Securities
Orders Executed
Pacific Coast
1856
H. Hentz & Co.
on
Members
Exchanges
New
York
San
Stock
Curb
York
Chicago
Cotton
Board
And other
COrtlandt 7-4150
Private Wires
S->n
„
Francisco
Monterey
?
—
Teletype NY 1-928
to Principal Offices
—
Santa
Oakland
—
Fresno
Barbara
-
N.
of
Inc.
Trade
,
.
.
Government
Group,
ment
Security Dealer
consisting of
bond
dealers
in
19
govern¬
New York
and
Chicago, will suspend opera¬
tions on Saturdays, R. C. Morris,
Bankers Trust Co., chairman of
the group announced. The action
of the dealers, who handle a ma¬
jor proportion of over-the-counter
transactions
in Treasury bonds,
coincides with the beginning of
Saturday closings by New York
City
commercial
banks.
Until
May 31, when the New York
Stock Exchange starts its schedule
of Saturday closings for the sum¬
mer, dealings in Government .se¬
curities on Saturday may be con¬
cluded on the exchange.
they properly belong to
Big Board of the New York
Stock
Exchange
or
other ex¬
changes. The listed and the un¬
listed
markets are
really two
separate and distinct things and
that
are
not
Y. Cotton
Exchanges
Exchange Bldg.
NEW YORK 4, N. Y.
CHICAGO
DETROIT
over
business,
be
thinking of
lifting some of the existing con-.
troJs, he points out. Mr. Twombly
makes these statements
despite
the fact, as he says, he fully ap¬
preciates
the
important
policing
functions of the SEC. Rules which
apply to the listed markets
may
do
not necessarily
apply to the
over-the-counter market, he feels.
Truslow to Attend
Financial Meeting
Francis Adams Truslow, Presi¬
York Curb Ex¬
dent of the New
change, will leave New York on
Thursday morning, April 3rd,* for
Montevideo,
Uruguay,
where he will
represent the:
Curb
E x-
change at the
third plenary
session
of
the
Inter-Ameri¬
Council
can
o
f
Commerce}
Produc-
and
tion scheduled
for
April 8th
through 11th.
Mr.
Truslow
will
fly to
Montevideo,
Francis
A. Truslow
spending one
day in Lima, Peru, enroute.
He
will also return by plane, arriving
in
New
York
about
the
16th
of
April.
known do not belong on the ex¬
changes, he feels. If the SEC were
to bother to find out what hap¬
when the stock of what was
relatively small and
closely-held company
is given
pens
at one time a
wide distribution and listed
on an
exchange, it would learn that the
original investors in a new issue
are not always protected regard¬
less of all the information about
the company
them.
v
Only the people more or
live
acquainted with the
somewhere
near
where
the
has its plant or plants,
can have any real idea of the ac¬
tual worth of the company, he
company
thinks.
It
is
an
error
to
the over-the-counter markets,
he
Frederking, has
when
the
Department.
them
effect
to
overcome
up
their
minds on the best course of
action
trying
to
ion
-
.
Charles Plohn has
general
partner
in
retired
the
as
firm
Newborg & Co. to form his
a
of
own
general stock brokerage business,
Plohn
Mr.
New
is
York
a
member
Stock
and
of
Curb
the
Ex¬
changes and of eight other stock
and is also a director
of several corporations
including
General
tories,
Finance
Corporation,
Incorporated.
located
at
30
Broad
He
will
make
cllAnlrl
be
Street, New
York.
Joins Daniel F.j Rice & Co.
(Special to The Financial Chronicle)
Rice &
of
with
Charles Plohn Opens
Own Inv. Offices
CHICAGO,
gested, would also have the
been
mining.
believes.
Extending provisions of the '34
the unlisted field, as sug¬
Manager of the Municipal
and
confuse
the functions of the listed and of
hurdles, for
as
industry, agriculture
operations or even the ex'stence General Phoenix Corporation,
of some' small' company, that is. the Morris Plan Corporation of
the people who, geographically, America and Universal Labora¬
making it difficult sometimes
for corporation executives to make
HOUSTON, TEX. — Wilbur H.
important decisions affecting their
Frederking has been admitted to
business, that is, it would often
partnership in Fridley & Hess, needlesslye re c t K formidable
firm
postwar opportunity for an interAmerican exchange of views on
problems of commerce, finance,
that is available to exchanges,
less intimately
First National Bank Building. Mr.
PITTSBURGH
GENEVA, SWITZER3LAND
The Montevideo conference will
furnish private enterprise its first
nationally
Act to
Wilbur
Exchange
Sacramento
.
Begininng April 5, members of
Fridley & Hess Admit
Exchange
Exchange,
Exchange
New York 5, N. Y.
where
the
Corporations Handicapped
Chicago Board of Trade
14 Wall Street
from the over-the-counter market
Exchange
New Orleans Cotton
Exchange
Exchange (Associate)
Francisco
York
New
controls
should
weeks in South America early this
to Investors
to taking
office as
Twombly is convinced, as Gijfh
./President, and is widely
many others are convinced, that acquainted there as a result of his
extending the provisions of the
government service in rubber pro¬
Securities Exchange Act of 1934 to curement work as an
official of
the larger unregistered companies the
Rubber Reserve Company and
would have a strong
tendency to the Rubber Development Cor¬
drive
rp§py
unlisted securities poration from 1942 tp 1945.
Exchange
Commodity
Stock
York Curb
Stock
"
Members
Sew
Sew
York
New
Schwabacher & Co
companies and other
institutions which accept
of
these private placings
securities
Govt. Security Dealers
Will Close Saturdays
it's
SEC
Danger
two
a
the
The trip will be Mr. Truslow's
offerings should be registered just first as the executive head of the
as the public offerings must be.
Curb Exchange. He spent several
*
ago.
sleeping sickness overtook it,
investigated
fore, he points out, with the I.B.A|
whiph believes that the private
Specifically this means the
Last week (the
latter part of it) you saw them placing of orders frequently
away from the market and
climb up to about 179.
Just
for them
to
be
when prices started to look waiting
weeks
Instead of devising ways
extend
Mr.
the other hand have
sur¬ ter chance of
move
who
thinks. He does not agree, there¬
In
Salle
are
Putney
wholly capable of evaluating
the
risks
which
they take, he
V>
on
and the NAM
are
a
or a
losses.
ever
The Com¬
insurance
selling
causes
SEC
the
CHICAGO, ILL.—J. J. O'Connor ings" said he couid see no
justifi¬
Co., Incorporated, 135 South La cation for such registration. The
program to various stocks and
at specific prices. Sometimes
this
should
ties Act of 1933 of "private offer¬
*
buying
still
being opposed to
the proposal which would require
the registration under the Securi¬
way to make known
and unknown factors work is
it got the losses
once
would
Only
wrote
begin¬
was
oversold
that
was
probability.
I
ago
them
record ^as
mittee feels that it
:
tape
on
were
One
here that the
explained by both
short, extension of the
would only gum up the processes*
°f trade just that much
more, he:
P.
any
•
^
As
Edward B. Twombly and William
this
change
from is anybody's guess. And in the
tide, but not its low or
yours is probably better than
high point.
mine.
revived."
decide to revive them.
kind of
this
smell out
can
to
.
responsible for killing simi**
lime coincide with those of the
Jar proposals made by the SEC
Chronicle. They are presented as before
the war and the Committee
those of the author only.]
wanted to make it plain that it is
still very much opposed to
them,
they said.
/
dormant
the
The
wishes
be
on
stay long
reactionary
appears
time.
In
34 Act to the unlisted
companies,
to
Records Opposition
Putney 3rd of the firm of Put¬
ney Twombly Hall & Skidmore
of New York, under whose guid¬
wait, of that I'm almost cer¬ ance the
report was prepared, the
tain.
Committee decided to include ref¬
More next Thursday.
erence to these proposals so as to
to
it
can
trying
so
their
report
■■
,
Thursday, April 3, 1947
folfP
hp
ILL.
ing,
members
Chicago
Jr.
to
Daniel ;
''.¥£<
F.
Co., Board of Trade Build¬
and
have
—
added
their
of
the
Stock
Richard
staff.
New
York
Exchanges,
H. Grimm,
*
Joins Hunnewell Staff
(Special to The Financial Chronicle)
BOSTON, MASS. —Vincent P.
Ryan is with Hunnewell & Co.,
49 Federal Street, members of the
New York and Boston Stock Ex¬
changes..
-.'v
„
-
Volume
I
-
165
Number 4582
THE COMMERCIAL & FINANCIAL CHRONICLE
Securities
•
Acme Electric
June
-
i
26
filed
rants for
stock to underwriters at
March 26
common.
■*
Air-Borne Cargo Lines, Inc., New
Feb.
14
(letter of notification)
York
PREVIOUS ISSUE
•
Corp., Wilmington,
»
(letter of notification) 350 shares ($100 par)
Price—$100 a share. No underwriting. To or¬
Automotive
March
r
Parts Co., Columbus,
American Water Works
CoInc., N. Y.
30, 1946 filed 2,343,105 shs. of common (par $5)
plus an additional number determinable only after the
results of competitive bidding are known. Underwriters
—To be filed by amendment. Probable bidders include
27
Bachmann
Dillon, Reaa &*Co. Inc., White Weld & Cb., and Shields
Co. (jointly), and W. C. Langley & Co. and The
First Boston Corp. (Jointly).
Offering—Price to public
by amendment.
r
($1 par)
common. Being offered for subscription to stockholders
of record Feb. 20 at $1 a share. Rights expired 3 p.m.
(EST.) March 11. Unsubscribed shares will be offered to
additional
for
Worsted Corp.
Uxbridge
,
;zz
shares of 4% preferred stock
(prr
,$100) and 200,000. shares of common stock (par $1).
Underwriters—Kidder, Peabody & Co. and Bear, Steam*
& Co. Proceeds—Will go to selling stockholders. Price
by amendment.
Offering date indefinite.
.
&
214,890 shares
of bank notes and
Nov. 27 filed 45,000
;
Ohio
(letter of notification) $300,000 4% sinking
fund debentures, due 1962. To be sold at $509 and $1,000
principal amount. Underwriter — The Ohio Co., Colum-
March
an
.5$
Registration
ganize business of utilizing carbide lime for agricultural
\- bus. For payment
and other commercial purposes.
working capital.
aggregate
price of $200. r Of the net proceeds ($292,940) $50,000
will be used to pay current bank loans; about $20,000
will be used for machinery and equipment, and the re¬
mainder for working capital.
common
American Superior Products
Delaware
shares
($1 par) common stock.
Underwriters—Herrick, Waddell & Co., Inc., and First
Colony Corp.
Offering:—To be offered publicly at, $5
a share.
Proceeds—Company will receive proceeds from
the sale of 68,880 shares and four selling stockholders
the proceeds from the sale of 63,860 shares.
Company
ajso will receive proceeds from the sale of 20,000 war¬
in
INDICATES ADDITIONS SINCE
o
Corp., Cuba, N. Y.
132,740
Now
(1833)
Beaunit Mills, Inc.,
New York
Sept. 27 filed 180,000 shares ($2.50 par) common. UnderAmerican Zinc, Lead & Smelting Co., St. Louis z writer
—White, Weld & Co., New York.
Price —By
Sept. 6 filed 336,550 shares common stock (par $1). Un- ! amendment. Proceeds—Of the total, 140,000 shares are>
z derwriting—No underwriting.
Offering—Stock will be : being sold by St. Regis Paper Co., New York, and the
the public through Greenfield, Lax & Co.,w Inc., New \ offered for
subscription to common stockholders in i remaining 40,000 shares are being sold by I. Rogosha,
York.
For reduction of current
obligations and for
the ratio of one additional share for each two shares j President of Beaunit Mills, Inc.
z z
z
k. working capital.
held.
:
Unsubscribed shares will be offered for subscrip¬
,
-
.
All American
March
;
"
v
'
Industries, Inc., New York
tion to officers and directors of the company
Price—By
amendment.
Proceeds—Working capital. Offering in¬
-
17
(letter of notification) $300,000 10-year 5%
income notes and 7,500 shares of capital stock (par 250).
Offering—To be offered in units of $1,000 of notes and
25 shares of stock at $1,000 per unit. Underwriter—A. W.
Benkert & Co., Inc., New York. To reduce indebtedness
incurred; in acquisition of outstanding stock of Okiahoma Steel Castings Co.
i
z
:
r
Berbiglia, Inc., Kansas City, Mo.
r
12
N. Y.
Inc.,
27 -filed *950,000 shares ($1 par) common stock.
Underwriter—Dillon, Read & Co. Inc., New York. Offerzlngr-A maximum of 100,000 shares may be sold by com-
firms, or corporations with whom the
corporation had network affiliation agreements on March
I 81. The remainder will be offered publicly. Price by
/• amendment. Proceeds—To prepay notes payable to act quire radio station WXYZ, to construct broadcast transl mitter for station KGO at San Francisco and for
working
capital. / •
,
~
:
I
-
American Iron & Machine Works Co., Oklahoma
t
-i
City, Okla.
:
z
(4/16) K
•
Feb. 24, filed $1,000,000 of 4%
sinking fund debentures,
due 1967; 25,000 shares (no par) $1.10 cumulative preferred and 60,000 shares (no par) common. Underwriters
Z
—Rauscher, Pierce & Co., Inc., Dallas, and Milton R.
Underwood & Co., Houston, Texas. Price—Debentures
will be offered at 100 while price of the preferred and
common stocks will be supplied by amendment. " Pro-
;.r
/<
-
;
a
share
new
scribed
shares
underwriters.
for each
common
of ^common
Price—Public
'
mon
'''v.."-
.
American
/
/ .:v
■
•
.
(50c par)
common.
Under¬
by amendment, / Price by
amendment. Proceeds—For general corporate purposes
including reduction of bank loans and outstanding notes.
American Overseas Airlines, Inc., New York
; •
Mar.
31
come
debentures and stock purchase warrants for shares
of
par
$1
filed
unspecified amounts
capital stock.
of subordinated in¬
Underwriting—None.
Offering
—The debentures and purchase warrants will be issued
to the company's capital stockholders.
The subscription
ratio will be supplied by amendment.
ment.
Proceeds—For
purchase
of
Price by amend¬
additional flight
equipment, terminal facilities and for other corporate
purposes.- Business—Operation of airlines.
American Tobacco Co., New York
j March 11 filed 896,404 shares ($25 par) B common
:
stock. Underwriter—Morgan Stanley & Co., New York.
/( Offering—Shares are offered for subscription at $57 Vz
■/; per share to
record
and B. common stockholders of
basis of one share of B. common for
common
April 2
on
each five shares held of record. Rights exprire April 21.
4 Unsubscribed
shares
will
sold
be
to ' underwriters.
Proceeds—Net proceeds will be added to funds for the
reduction? sof outstanding bank loans aggregating $85,-
000,000
as
said
"we
have
stock"
as
Artcraft
of Dec. 31, 1946.
:
It also
mon.
covers
z.--/•■./ -z.,,,.zyy
Z'-zy
ZZ ;
■
Z
•
ZZ/i-
:'-v
.
.
..•;
"z
of the prospectus,
for
distribution.
to be sold.
-
-
of the registra¬
effect sales hgr
-
.
I
'
Price—At market.
Proceeds—Go to sell¬
•
1
,
z/'Z/Z':Z •'/
}
z.
^
Black, SiValls & Sryson, Inc., Kansas City, Mo.
Z'ZZ-'-'Z;
;
/ y.,/'/
•
Under¬
& Co.,
both of Chicago.
Offering—Shares are part of the 99,006
shares purchased from the company by F. S. Yantis &
Co. and H. M. Byllesby & Co. who will receive all of
the proceeds. Price by amendment. Proceeds—Proceeds
go to the selling stockholders.
Business—Manufacture
of tanks for oil and other industries.
\
C'Ui J i Z- /» Z;Z
*
Blumenthal
(Sidney)
Z
'
^
V'v-v'
••
will
receive proceeds from the sale of all of the preferred
and 100,00 shares of common. The remaining 50,000
company's treasury for funds expended - in re¬
demption of 3,907 shares of 7% cumulative preferred on
April 1, and for funds deposited in trust for redemption
on Oct. 1 of remaining preferred shares.
Although it wa»
shares of
proposed
of
share and $12 a common share. Proceeds—Company
are being sold by three stockholders.
proceeds of $2,300,000 will be used by
to pay off bank notes of about $1,100,000
common
Estimated
net
the company
and
to
per
to withould action.
purchase
Atlantic
City
(N. J.)
Bobbi
Motor
Car Corp.,
Birmingham, Ala.
(letter of notification) 60,000 shares ($1 par>
common. Price—$5 a share. Company proposes to offer
Mar.
Electric Co.
.
March 19 filed
522,416 shares ($10 par) common, being
American Gas & Electric Co. Underwriters—
To be determined
by competitive bidding. Probable
bidders include: The First Boston Corp., and Drexel &
3
12,997 shares of common in exchange for its unsecured
promissory notes in the amount of $64,985 held by dis¬
tributors of company's proposed products. Underwriting^
the stock will be sold by officers and directors of the
offered by
(jointly); Shields & Co.,: and White, Weld & Co.
company. For completion of display automobiles now
(jointly); Dillon, Read & Co., Inc., and Smith, Barney
/'under construction.
Co. (jointly); Blyth & Co., Inc.; Union Securities
Corp. Price—To be determined by competitive bidding.
f •
Bookcraft, Inc., Milwaukee
Proceeds—The offering is part of American's plan to
March 27 (letter of notification) 250 shares ($100 par>
dispose of its holdings of 1,150,000 outstanding shares
of Atlantic City. The shares remaining after the public ; preferred. Price—$100 a share. No underwriting. For
offering will be distributed as dividends on American's / purchase of machinery and equipment.
common stock. This dividend policy will become effec-y
; 'Z1.v
(Continued on page, 54)
Co.
>
&
,
'
—SPECIALISTS INr-
>
,
•
,
.
Z'fzV-/ \ /
Vv
:/
Underwriters and Distributors
of
United States Government Securities
y'-H z;Z--;
^
-
Corporate and Municipal,
:vzVyZy^r';zz-r:zzz";/y
y
Municipal Bonds |
C. J. DEVINE
INC.
■/
CORPORATION
.
*-r>;*.
Boston
'
irr•;
:
•
v:'A.
."•-
•
/.
9fv-v•-"*•;
New York
Chicago and other cities
-
'*•
•
'• *
z
-
Pittsburgh
°
subscription to stockshare, company on Sept. 20 decided
to offer the stock for
holders at $10
additional machinery and equipment
in the amount of $1,200,000. Offering date indefinite. /.
I
-
z!
Aug. 30 filed 119,706 shares-(no par) commorrand subAscription warrants relating to 30,000 shares thereof.
Underwriting — None.
Proceeds —For reimbursement
shares of common reserved for issu¬
conversion of preferred. Underwriter—Newburger & Hano, Philadelphia. Price—$25.50 a preferred
t
FIRST BOSTON
•'
& Co. Inc., Now York
'Securities
?;
%
1
The
•
•
March 27 filed 72,000 shares ($1 par) common.
S. Yantis & Co. and H. M. Byllesby
upon
State and
-
'
.
writer—F.
Sept. 27 filed 53,648 shares ($25 par) 4%% cumulative
convertible preferred and 150,000 shares ($1 par) com¬
ance
purpose
ing stockholders.
it will
tive June 15 and will continue to the end of 1948. 4 z /
Corporate and Public Financing
•
conclusion
The
enable holders to
Berkey & Gay said the shares had been sold-in lMf
a group of about 50 persons who represented
they were purchasing the shares for investment and not
are
Hosiery Co., Philadelphia
.
■M'i-'
the
to
to
offering public. The Commission staff stated that regis¬
tration is required if any of the remaining 733.575 shares
to issue any additional shares of com¬
part of company's refinancing plan.
,
:
come
is
far, 231,204 shares have been sold in the open mar¬
ket and the Commission had raised the questioa as to
whether such sales had the effect of making the entire
George Eastwood, President, in letter to stockholders,
22
statement
So
■
Business—Manufacture of food processing equipment.
v
>
not be necessary
Machinery Corp., Orlando, Fla.
Mar. 31 filed 143,000 shares
writer—Name to be filed
/
z
Proceeds—Net proceeds will be used to retire all
unexchanged shares of $6 prior stock and to redeem Its
Dec.
issued and outstanding.
and 1945 to
outstanding 7% preferred stock.
/•■
•
use
offering prices by amend¬
pay $712,500 balance on a bank loan, retire$850,000 promissory notes, and provide working
capital. Business—Manufacture, sale and rental of ma¬
terial and equipment used in drilling and equipping oil
•
>
Unsub-
are
tion
ment.
z
ment of
•
•
share held.
shares ($1 par) capital stock. Undet*-
writing—None. Offering—Company said all of the shares
will be purchased by the
and gas wells.
;
:
second preference stock, Series A, and 1,355,240 shares
common stock
(par $5).
Underwriter—Kuhn, Loeb &
Co., New York.
Offering—The 350,000 shares of first
preference stock will be offered in exchange to holders
of its 532,996 shares of $6 cumulative convertible prior
preferred stock at the rate of 1.4 shares of first prefer¬
ence stock for each share of
$6 prior preferred. Shares
of first preference not issued in exchange will be sold
to underwriters/The 300,000 shares of second preference
stock will be offered publicly.
The 1,355,240 shares of
common
will be offered for subscription to common
stockholders of the company in the ratio of one-third
of
ceeds—To
,
Feb. 3 filed 733,575
;
Co., Chicago
July 12 filed 350,000 shares (no par) cumulative first
preference stock, Series A; 300,000 shares of convertible
pany to persons,
(
Armour and
".
t June
?
Mich.
by six stockholders.
f American Broadcasting Co.,
• •
(letter of notification) 41,000 shares of 5%
I cumulative convertible $6 par preferred. Offering price
definitely postponed.
; $6 a share. Underwriter—Estes, Snyder & Co., Topeka,
/
Arkansas Western Gas Co.
Kans. To pay outstanding indebtedness and expenses ami
June 5 filed 16,197 shares of common stock (par $5). I to
open five additional stores in Kansas City, Mo. OfferUnderwriters—Rauscher, Pierce & Co. Inc., and E. H. 1 ing postponed indefinitely.
zzZVy:\z/;'^ ./(*:"/•:'%; ■
Rollins & Sons Inc.
Offering—Stock will be offered to
the public. " Price by amendment.
Berkey & Gay Furniture Co., Grand Rapids,
z
Shares are being sold
Sept.
48 WALL
Chicago
•
■
z,:
ST., NEW YORK 5, N. Y.
Boston
•
Cincinnati
Philadelphia
*
St. Louis
•
•
&
CO.
y...(/:;//
HAnover 2-2727
Pittsburgh
•
San Francisco
x
Cleveland
Kidder, Peabody ^ Co.:
Founded 1865
^
„
^Members of the New York and Boston Stock Exchanges
New York
Boston
Philadelphia
Chicago.
,
\
54
THE COMMERCIAL & FINANCIAL
CHRONICLE
(1834)
The shares will
be
offered
subscription to class A
share, on the basis of one share
Unsubscribed shares will be offered
share. Price—$20 a share. Proceeds
stockholders at $20
for each share held.
NEW ISSUE CALENDAR
publicly
will
(Showing probable dato of offoring)
April 7, 1947
•
Chicago Indianapolis & Louisville
Noon
(CST)
at
be
$20
used
track at
a
to
for
cost
of
completing
665
shares
are
to
be offered to
Chesapeake & Ohio Ry. Noon (EST)__Eq. Tr. Ctfs.
Container Corp.
of America
Preferred
;
stock
Debs., Pfd., Common
Refractories
360,000
shares
of
The
common.
share.
a
par)
Underwriter—Smith,
Proceeds go to the selling stock¬
James C. Hart.
common
Price—At market.
To
be
sold
through Jackson & Co. and Flannery & Co., both of
Youngstown, Ohio. Proceeds go to the selling stock¬
holder.
?
;
-
.
Community
subsidiary
Frosted
Foods
Co.,
Philadelphia
March 14 (letter of
notification) 25,000 shares of class
A common stock (par
100). Price—$5 per share. Under¬
plans to amend its charter to create the new
preferred
stock and to
reclassify and increase the authorized com¬
Common
($1
Thomas, President of the
(letter of notification) 24,000 shares of
behalf of
on
holdings in California Oregon, will sell the
remaining
Company
D.
bank
Machinery & Engineering Corp.,
Hamilton, O.
Feb. 24
30,000 shares of the common. Standard Gas & Electric
Co. (parent), which is planning to sell its entire com¬
mon
American Iron & Machine Works
of
Columbia
bidders include Blyth &
Co., Inc.; The First
Corp.; Harriman Ripley & Co.; Kuhn, Loeb & Co.,
and Smith,
Barney & Co. (jointly); Merrill Lynch, Pierce,
Fenner & Beane, and
Bear, Stearns & Co. (jointly).
California Oregon will sell all of
the preferred and
April 16, 1947
Cohart
be
Boston
Equip. Tr. Ctfs.
Rosslyn Loan Co.___
($100 par) cumulative pre¬
($20 par) common.
Under¬
determined by competitive
bidding.
390,000 shares
Probable
Preferred
Erie RR.
and
writers—To
prepayment
Feb. 24 (letter of
notification) 6,500 shares of common
stock (par $1) on behalf of
selling stockholders. Under¬
writers—F. H. Koller & Co.
Price—$6 a share.
March 26 filed 60,000 shares
ferred
April 15, 1947
sale
competitive
Clinton Machine Co.
California Oregon Power Co.
Common
behalf of Donald
on
company.
Price—$6
Hague & Co., Detroit.
holder.
shares, and
100 preferred shares will be offered in units of
2
shares and 1 preferred at $500
per unit. Pro¬
ceeds for initial
capital, costs of
organization, etc.
Corp
through
Clinton Machine Co.,
Clinton: Mich.
17 (letter of
notification) 10,000 shares
common
April 10f 1947
probably
Feb.
stock
the organizers
the
Common
sold,
Barney & Co..
Proceeds—For
loan notes of North American.
Caddie-Croft, Inc., New York
for services. The balance of the
common, 335
April 8, 1947
Crown Capital
race
Lincoln, R. I.
common
be
Probable' bidders include Dillon, Read &
Co. Inc.; The
First Boston
Corp.; White, Weld & Co/and Shields
& Co.
(jointly); Kuhn, Loeb & Co. and W. C. Langley
& Co.
(jointly); Otis & Co.; Blyth & Co., Inc.; Smith,
March 31 (letter of notification) 100 shares of
preferred
(par $100) and 1,000 shares of common (no par) of the
Equip. Trust Ctfs.
Georgia Hardwood Lumber Co
a
to
are
a
finance the
Thursday, April 3, 1947!
mon.
Pitney-Bowes Inc
writing^
nia
Preferred
Peirce & Co., Philadelphia has
guaranteed the payment
of semi-annual dividends of 12
Vz cents each in Oct., 1947
Gas.
April 21, 1947
The 312,000 shares of
$25 par common of Califor¬
Oregon present, outstanding are held by Standard
They will be reclassified into 390,000 shares ($20
par)
Ferguson (Harry), Inc
Pfd. and Com.
—Standard Gas will
Hamilton Mfg. Co
loan
Bonds
Morris Plan Corp. of America
Debentures
United States Rubber Co
notes.
reimburse
use
California
its
treasury for previous additions
and
working
capital.
Frederick
April 1948.
(4/15)
($100 par)
preferred stock.
cumulative
Underwriter—Kidder, Peabody & Co.,
New
York.
Price—By amendment. Proceeds—To be
added to general cash funds for
payment of a portion
the company's program for additions and
improve¬
im¬
of
provements.
Debentures
Additional
Container Corp. of America,
Chicago
March 21 filed 100,000 shares
the proceeds to reduce its bank
Oregon will apply its proceeds
to redeem
45,761 shares ($100 par) 6% preferred, series
of 1927, at $110 a share. The
balance will be used to
Common
Hawaiian Electric Co., Ltd
and
common.
Standard Gas will make a capital con¬
tribution of 30,000 shares to California
Oregon. Proceeds
none.
ments.*#
•
I
(Continued from page 53)
•
Borg
(George W.)
1
and
;
i
preferred
*
Proceeds—Net proceeds, together with other
funds, will
>
:
Omaha, Neb.
—The shares
•
•
period of five years. Price—$45 a share.
Proceeds
be added to general funds for
purchase of addi¬
tional- equipment.
Business—Warehousing of
Offering date indefinite.
-
stock. Price
Mitchell Securities
$6.50
—
a
share.
paper and
Underwriter
selling
Cribben
—
Porcupine Gold Minesy Ltd.9 of Torontof
Central Mills, Inc.,
company, the remaining 5,500 pre¬
ferred shares and all of the
common are
being sold by
present stockholders. Net proceeds to
the company, es¬
timated at $147,500, will be used
to prepay to the ex¬
tent possible
Flying
•
•
Brook
Haven
Mar. 27 (letter of
common.
hardt
&
Proceeds—Working capital, etc. Offering
itely postponed.
•
Farm, Inc., Wilmington, Del.
notification) 100,000 shares of Class A
Claude
Neon,
breeders and other business
purposes.
.
B. Eber-
of
I
common
of
10
each
stockholders
shares
on
basis
Price by amendment.
Proceeds—To finance airline
operations and acquisition
and development of oil
properties.
Company also plans
i to advance funds to Summit Airways, Inc., of whose
stock it owns 61%.
Business—Airline operations and oil
Brooklyn
(N.
Y.)
Union
Gas
Co.
Bids
Rejected—Company July
23 rejected two bids received for the stock.
Blyth & Co., Inc., and F. S. Moseley & Co. and associates
submitted a bid of 100.06 for a
4.30% dividend. Harriman
Ripley & Co. and Mellon
Securities Corp. bid 100.779
for a 4.40% dividend.
In¬
definitely postponed.
Burrillville Racing
Association, Pawtucket,
R. I.
(no par) class A stock.
Un¬
Feb. 27 filed 38,500
shares
Barrett & Co.,
derwriter
Providence, R.
I.
Offering-
<
v
business,
a
/•
|
common
March
»
.
land
Rights
19
for
by The
which
is
stockholders
at
$15
every
expire
per
May
of
offering 1,714,524
North American
share to the extent of
five
,
27...
North
,
The
proceeds, estimated at $300,000^
American
of
-
one
shares
.remaining133,383
••
($1 par)
-
-■•••
Mich/
common.
Under-
For
will
—
Co., Detroit. Price
$5.50
Stock is being sold by six share¬
receive proceeds.
working capital.
;
/-HT'
Dodge & Cox Fund, San Franciscd<
Unden^rUirtgr-
Dodge & Cox, San Francisco, investment managers. Price
on market.
Proceeds—For investment.
Business
based
—Investment
North
shares
operations.J/
Mar. 31 filed 20,000 beneficial shares.
(O.) Electric Illuminating Co.
21, filed
1,847,908
shares
(no par)
common.
[ Offering—All of the shares are owned
Co.,
share. Proceeds
holders who
Feb.
American
stock (par $1).
common
writer— C. G. McDonald &
/ Boston.
Cleveland
i
Proceeds—Net
Sept. 25 filed 70,920 shares
.
May 3 filed 70,000 shares of cumulative
preferred stock
($100 par). Underwriters—To
be filed by amendment
Auction, Inc.,
(
Detroit Typesetting Co., Detroit,
for
one
held."
(4/10)
Offer¬
ing—Shares will be offered to the public at 75 cents'-a
Under¬
subscription to
Wilmington, Del.
Underwriters—Sabiston-Hughes, Ltd., Toronto.
will be used for mining
March 28 filed 223,954 shares
($1 par) common.
writing—-None.
Offering—Shares will be
for
Cald¬
Cyprus Mines, Ltd., Montreal, Canada-;!;/•,7
Inc., New York
offered
mink
Capital Corp.,
May 31 filed 500,000 shares of
indefin¬
share
Price—$2 a share. Underwriter—L.
Co., of Wilmington.
For purchase
of 5,000
S.
filed
Cumberland Valley Poultry & Egg
share.
Fur
maximum
of Robert
April 1 (letter of notification) 1,500 shares of class B
non-voting stock (par $10). Price—$10. Underwriting,
none. Company intends to sell the stock to farmers and
tradesmen who buy and sell products handled by the
company. Proceeds for operation and expansion.
one share for each
7% shares held.
Unsubscribed
shares will be sold to
underwriters.
Price by amend¬
ment.
each.
Underwriter—White and Co., St.
Louis, Mo. For expansion of
operating facilities and for
working capital.
22
Bethlehem, Pa.
rate of
share of
-
a
behalf
on
ceeds will be used as capital for company's subsidiaries
engaged in the small loan or personal finance business.
Dunbridge, O.
Central Soya Co.,
Inc., Fort Wayno, Ind.
Aug. 21 filed 90,000 shares (no
par) common. Under¬
writer—None.
Offering—Common shares initially will
be offered for
subscription to common stockholders at
Service, Inc., Robertson, Mo.
(letter of notification) 50,000 shares
($1 par)
cent cumulative, convertible
preferred and 50,000
shares (10c par) common.
Price—$5 per unit, consisting
of one
common
250,000 shares ($1 par) class A common.
Underwriter—Hodson & Co. Inc., New York, will act as
selling agent. Price—$4.25 per share. Proceeds—Net pro¬
,
27 Vz
(letter of notification)
Crown
Jan.
(letter of notification) $300,000 of first mort¬
gage bonds. Price—$500 per unit. No
underwriting. For
retirement of preferred stock, for
purchase of two alfalfa
dehydrating plants from Logan County Dehydrators, Inc.
and for retirement of latter's
preferred stock.
March 24
indefinite.
Chicago
Under¬
March 13
outstanding $149,300 mortgage liabilities.
Offering date indefinite.
Offering date
Sexton Co.,
well, a director of company. Underwriters—Swift Henke
& Co., and Paul H. Davis
Co., Chicago.
;
a
Proceeds—7,000 preferred shares
by
&
shares *($5 par)
underwriters.
Offering—To the public at
share in Canadian funds. Proceeds—For a
variety
of purposes in connection with
exploration, sinking of
shafts, diamond drilling and working capital:
$1
stockholders.
March 21
June 24 filed 400,000 shares of
common stock.
stock.
Price by
Proceeds—Go to Joseph Levy, President,
—
writer—No
convertible preferred stock and
50,000 shares (200 par)
common stock. Underwriter —
C. K. Pistell &
Co., Inc.,
New York. Price
$25 a share for preferred and $11
a share for
common.
Brayton
~'.:M *
amendment.
Ontario
Braunstein (Harry),
Inc., Wilmington, Del.
Sept. 25 filed 12,500 shares ($25 par)
4%% cumulative
•
electrocast refractories principally for use in the
lining
of furnaces of the glass industry.
'
1/ -
Underwriters—First Boston Corp., New York.
working capital.
Carscor
Price by amendment. Proceeds
being' sold by porning, Glass 'Works*
New York, and represent 88.8% of the total
outstanding
common
of the company.
Business—Manufacture of
Corp., New York. For equipment and
Sept. 27 filed 268,875 shares
($1 par) common. Under¬
writer—Van Alstyne, Noel &
Co., New York. Price—By
amendment. Proceeds—Stock is
being sold by share¬
holders who will receive
proceeds.
are
Under¬
fLazard Freres
Crawford Clothes, lnc.,L.I, City, N. Y.
Aug. 9 filed 300,000 shares ($5 par) common
~
capital
Gum, Inc., Philadelphia
Y.
Cohart Refractories Co.,
Louisville, Ky.H4/16)'
Co/ both of New York;
Carney Fasteners, Inc., Columbia, S. C.
Jan. 13 (letter of
notification) 32,950 shares ($5 par)
accrued interest.
•
Mar. 28 filed 182,520 Shares ($5
par) common.
writers—Harriman Ripley & Co.; and
a
^
N.
Offering—Of the total 102,500 shares are
being offered by selling stockholders. Price by amend¬
ment
Proceeds—The company, which is selling 50,000
shares, will apply proceeds tp general funds. Business—^
Manufacture of diversified line of metal products.
—To
paper products.
Inc.,
New York.
Mar. 31 filed 10,000 shares
($1 par) common:, Under¬
writing—None. Offering—Shares will be offered direct¬
ly to officers and employees of the
company at $45 a
share.
Purchasers must agree not to transfer the shares
for
Continental-United Industries Co.,
($1 par) common. Under¬
writers—Aronson, Hall & Co., and P. W. Brooks & Co.^
subordinated note in
$5,268,750 and
being sold
-Carpenter Paper Co.,
<
end 95,000 shares are reserved
for issuance upon exer¬
cise of <
outstanding warrants. Price—By amendment
are
on
Carpenter Paper Co., Omaha
March 27 (letter of
notification) 550 shares of common.
Price—$55 a share. Underwriter—Kirkpatrick-Pettis Co.
For working capital.
.
Stroud & Co.; Inc.
Offering—Preferred will have non-detachable
stock
purchase warrants for purchase of 30,000 shares of com¬
mon stock of the total
common, 375,000 shares will be
offered for sale for cash.
30,000 shares are reserved for
issuance upon exercise of warrants
attached to
Bowman
•
Mar. 28 filed 152,500 shares
•
Boston Store of
Chicago, Inc.
Sept. 10 filed 30,000 shares ($50 par) 5% cumulative
preferred and 500,000 shares ($1 par) common. Under¬
be used to
pay the company's 2%
the principal amount of
Texas
Price—$2 a share.
No underwriting. To
purchase oil and gas leases, drilling
equipment and for conduct of oil business.
director.
Co.
Fort Worth,
behalf of Cliff
Groves, in payment of: oil
and gas leases purchased from him.
(letter of notification) 1,000 shares ($10
par)
capital stock. Price (market) estimated at
$12 a share.
Underwriter—Paul H. Davis & Co.,
Chicago. Being sold
on. behalf
of Thomas
B.
Gibbs, Janesville, Wis., a
&
Corp.,
on
common
Corp., Delavan, Wis.
Oil
(letter of notification) 47,850 shares ($2
par)
behalf of the
company and 2,250 shares of
common
March 26,
writers—Paul H, Davis
Cal-Tex
March 24
business.
to
Douglas Oil Co. of California, Clearwater, Calif.
record
Cleve-
held.
shares
March 13
:
51/4%
fered
(letter of notification) 11,500-shares ($25 par)
cumulative convertible first preferred. To be of¬
at
a
maximum
of
$26
a
share. Underwriters
—
Volume
.
*
Number 4582
165
jhe commercial & financial chronicle!
Co. of California, Cruttenden & Co., Pacific
Capital Corp., all of Los Angeles; Brush Slocumb & Co.,
San Francisco; and Adele W. Parker, Clearwater. To
Pacific
Fizzadent
•
Corp., Jackson
Heights, N. Y.
estimated cost
Mar.
March 12
common
'f
(letter of notification) 25,000 shares ($1 par)
behalf of the issuer, 12,500 shares ($1 par)
27
J amendment. Issue
•
for the account of Thomas R. Heyward, Jr.,
common for the account of
common
Mrs.
Thomas
Foremost
East
Electric
Coast
Co.,
West
Allen
and
plied
due
1977, and 60,000 shares of $10
writers—To
determined
be
Probablebidders
;
include
competitive
by
Halsey,
(bonds only); Harris, Hall & Co.
Kidder, Peabody & Co.
Offering—To the public.
registration showed that $800,000 of the bonds and
*
A.
of
.*■
Public Service Co., parent of the registrant.
East Coast Electric will use proceeds from
£
the
stock
common
'
ness—Public
utility.
indicated their
all
for other
corporate
Fresh
4,500
shares
willingness to surrender shares of
company held by them in
purposes.
•
Hawaiian
Mar.
A
■
A
.
,
Inc., Los Angslss
Electric
Co.,
Ltd.,
(4/21)]
Honolulu
filed
31
$5,000,000 first-mortgage bonds, series F,
due 1977.
Underwriters—Dillon, Read & Co., Inc., New
York, and Dean Witter & Co., San Francisco.
Price by
amendment. Proceeds—To repay $3,000,000 of short term
promissory notes and to reimburse its treasury for pre¬
vious
construction
expenditures.
Business — Public
Business—Dairy business.
Inc., Columbia, 8. C.
Aug. 30 filed 450,000 shares (100 par) common. Under¬
writer—Newkirk & Banks, Inc. Offering—Of the total
company is selling 350,000 shares and two stockholders,
%
/
Stores,
Johnston, Lemen & Co., Washington, D. C. Offering—
To be offered to the public at $8 a share.
Proceeds—
Company is selling 60,000 shares and stockholders are
selling 40,000 shares. The company will use its proceeds
to pay the costs of opening additional stores and to ex¬
pand merchandise in its existing stores. Offering tem¬
porarily postponed.
t
of
of the
Dry Foods,
the sale of
^
remaining
not being underwritten and will be offered to
of its officers and one large stockholder who
exchange for shares of new preferred. Part of the shares
are
being offered in satisfaction of an obligation,
$57,000 in connection with the purchase of a plant
in Jacksonville, Fla.
Price by amendment. Proceeds—
For redemption of 25,233 Vs shares of 6% preferred and
Proceeds—
,,v-
The
(4/21)
June 27 filed 100,000 shares ($1 par) common stock.
Underwriters—Van Alstyne, Noel & Co., New York, and
Offering—65,500
to pay
$500,000 of bonds toward the payment of outstanding
first mortgage notes and repayment of bank loans. Busi¬
'J,*
amendment.
Manufacturing Co.
100,000 shares
; -A
Hartfleld
also
Inc.
Co.;
The
being offered by East Coast
are
Co., both of New York.
preferred-stock
6%
bidding.
Stuart & Co.
(Inc.); Otis &
by
certain
Under-
par common.
&
31 filed
ment.
cumu¬
are
have
Mar. 28 filed $1,300,000 of first mortgage bonds, Series A,
iV
Fla.
shares will be offered to the public at a price to be sup¬
Va.
Point,
Jacksonville,
lative preferred stock with common stock purchase war¬
rants.
Underwriters—Paine, Webber, Jackson & Curtis;
R.
stock
•
Inc.,
70,000 shares ($50 par) 4%% series
Hamilton
($5 par) common.
Under¬
writer—A. C. Allyn & Co., Chicago, and Loewi & Co.,
Milwaukee.
Price by amendment.
Proceeds—To retire
on May 1 company's outstanding preferential participat¬
ing stock. Business—Professional furniture and equip¬
be withdrawn.
may
Dairies,
March 28 filed
Hayward, Jr.
Price—At market (ap¬
proximately $3.25 per share).
Underwriter—Johnson
& Johson, Pittsburgh, Pa., and The
First Cleveland
Corp., Cleveland.
The company will use its proceeds
for working capital.
<
O
on
1* and 12,50a shares ($1 par)
It also will use
dends.
July 29 filed 110,000 shares ($1 par) common stock, all
outstanding. Underwriters—Cohu & Torrey. Price by
r
of
$213,258, exclusive of accrued divt*
approximately $402,000 toward
the purchase of a manufacturing plant in Chicago; balance for working capital Offering date indefinite.
(letter of notification) 15,000 shares (10c par)
common.
Price—$1.50 a share.
No underwriting.
For
additional working capital.
V
i
■
'
-
Mar.
purchase 493 shares of capital stock of - G. H. Cherry,
Inc. out of a total of 625 such shares presently outstand¬ /Av'y.. 'ivi-y
:
""
■'-.y-'.-A
A--';v:,- A
Foreman Fabrics Corp., New York
ing.
Duraloy Co., Scottdale, Pa.
X1835)'"53
utility.
Roland E. Fulmer and Louis H.
Ebaloy,
-
March
2%%
unit.
Rockford,
Inc.,
y
III.
12
(letter of notification) $125,000 of 10-year
subordinated debentures, due 1957. Price—$25 a
No
underwriting. To retire current liabilities and
Newkirk, Jr., are selling
the remaining 100,000 shares. Price—$6 a share. Proceeds
—For purchase of sweet potatoes, plant expansion, addi¬
tional storage facilities, research and development work
and working capital.
\
for working capital.
Georgia Hardwood Lumber Co.
Dec. 31 filed 5,000 shares ($100 par) 5% non-cumulative
""
preferred. Underwriters—None. Offering—To be offered
\ at par to customers, officers and employees of the
com-
For corporated purposes including
improvement of the manufacturing
plant and machinery and equipment.
&
Electronic
'
March 28
common
Lee
obligations, purchase helicopters and equipment and for
working capital.
(4/8)
of
Houston Lighting & Power Co.
Industries
subscribe for one share of common for
$37.50 a share. It will on April 16
State of Texas an amendment
to its charter converting its then outstanding 517,990
shares of common into 1,035,998 shares and to convert
its
then authorized
600,000 shares of common into
1,200,000 shares and to increase the total authorized
common to 2,000,000
shares. Unsubscribed shares may
be offered publicly through underwriters. Proceeds—To
be added to working capital for general corporate pur¬
poses, including construction of additions to its system.
the
Inc.,
Milwaukee, Wis.
July 31 filed 50,000 shares of $1.25 cumulative converti¬
ble preferred stock series A ($20 par) and 150,000 shares
(10c par) common, all issued and outstanding and being
•old by eight selling stockholders.
Underwriters—Van
Alstyne Noel & Co. Price by amendment. Proceeds—
To selling stockholders. Offering temporarily postponed.
through
Klos, President. For payment of accounts payable.
Glencair
Co., Baltimore, Md.
Mining Co. Ltd., Toronto, Can.
Oct. 2 filed 300,000 shares ($1 par) stock. Underwriter—
Mark Daniels & Co., Toronto. Price—40 cents a share
March 12 (letter of notification) $250,000 first mortgage 10-year 5% bonds, and 250,000 shares (10 cents par)
common.
Price—$550 per
and 500 shares of common.
^
right to
file with the Secretary of
>
^
Offering—Company will issue
stockholders of record on April 25 giving them
none.
each 4 shares held at
| For working capital and for purchase of goods for sale.
:;£
|
Underwriting—
warrants to its
common
timber, to construct additional manufacturing
Glen
*
(letter of notification) 2,500 shares of class B
Elkhorn-Beaverhead Mines
'i
Mar. 25 filed 259,002 shares of common.
units and for other expansion purposes.
Engineering Inc., Spokane, Wash.
and 250 shares of preferred. To be sold
270,000 shares of capital stock. Under¬
writer—Strauss Bros., Inc., New York.
Price—$3.50 a
share.
Proceeds—Net proceeds will be used to pay
100,000 shares ($1 par) common. Under¬
writers—Reynolds & Co., New York, and Equitable Securities Corp., Nashville, Tenn.
Price—$8.20 a share.
Proceeds—To obtain long-term cutting contracts on large
tracts
V pany. Proceeds —
modernization and
•
14 filed
March 14 filed
Edelbrew Brewery, Inc., Brooklyn, N. Y.
f
i
Helicopter Air Transport, Inc., Camden, N. J.
March
!:
•;
.V
.
4
: /■
"W
;>'•
\ -V:.\ y';"
.V.
•
;j •
;'7
*•.
■
.
'
'' '
<rjf.
,
]
;* ' '
/ }*l ?* £
*)•♦?»/
•'
Hy-Grade Supply Co., Oklahoma Clty
mine development. •T Dec. 3 (leter of notification) 54,350 shares of cum. conv.
1 preferred and 50,000 common stock purchase warrants.
Glensder Textile Corp., New York
Price—$5.50 a preferred share and 2 cents a warrant.
Underwriter—Amos Treat & Co., New York. It is ex¬
Aug. 28 filed 355,000 shares ($1 par) common, of which
pected that a full registration will be filed later with the
55,000 shares are reserved for issuance upon the exer¬
.(Canadian
unit consisting of $500 bond
No underwriting.
For mine
Funds).
Proceeds—For
.
development.
^
c
•
•
,
>
y
Empire Copper Corp., Douglas, Ariz.
•
March 27
(letter of notification) 600,000 shares of
Price—50
^mon.
cents
a
share.
No
sec.
of stock purchase warrants.
Underwriter — Van
Alstyne, Noel & Co. Offering—The 300,000 shares are
Illinois Power Co., Decatur, III.
issued and outstanding and being sold for the account
June 17, filed 200,000 shares ($50 par) cumulative pre¬
of certain stockholders.
Company has also issued 55,000
ferred stock and 966,870 shares (no par) common stock.
stock purchase warrants to the selling stockholders at
Probable bid10 cents a share entitling them to purchase up to Aug. I, / Underwriters—By competitive bidding.
;
ders include Blyth & Co., Inc.; The First BbSton Corp.;
1949, common stock of the company at $11 a share. Price
W. E. Hutton & Co. Proceeds—Net proceeds from the
by amendment. Offering temporarily postponed.
sale of preferred will be used to reimburse the com¬
Griggs, Cooper & Co., St. Paul, Minn.
pany's treasury for construction expenditures. Net pro¬
ceeds from the sale of common will be applied for re¬
Sept. 3 (letter of notification) 12,000 shares ($1 par)
For
^operating purposes.
Equipment Finance Corp., Chicago
;
^
Feb. 281 filed
8,025 shares ($100 par) 4% cumulative pre¬
ferred, series 2, and 25,070 shares ($10 par) common.
0 Underwriting — None.
Offering—Company anticipates
K
that
the
of
entire
officers.
5 and
will
be
sold
to
its
■
employees
Proceeds—Estimated proceeds
$1,045,000 will be applied to working capital.
Federal
V
offering
Price—Par.
Electric Products Co.,
common.
Price—$25
Newark, N. J.
Underwriters—Kalman & Co., Inc., St PauL
a share.
Proceeds — For improvement and
modernization program. Offering
Feb.
26, filed 150,000 shares ($1 par) common class A.
F. Gillespie & Co., Inc., New York.
^Price—$7.25 a share.
The registration j states princi6 pal stockholder has granted the underwriters an
dption
to purchase 45,000 shares of class B ($1 par) common
at $7:25 a share, exercisable for a period of three years.
*. Proceeds—Proceeds
of approximately $870,000, together
with $755,000 of other bonds, will be used to
repay the
1 balance of $34,000 of a property mortgage, to pay off
loans in the amount of $1,295,000 to Bankers Commerh cial Corp., New York, and for additional working capital.
sl
-
cise
com-
underwriting.
Underwriter—E.
Grolier
demption of 5% cumulative convertible preferred stock
converted into common prior to the redemption
date. The balance will be added to treasury funds.
Company has asked the SEC to defer action on its fi¬
nancing program because of present market conditions.
/ not
indefinitely postponed.
Society, Inc., New York
July 29 filed 18,500 shares at $4.25 cumulative preferred
stock ($100 par),
with non-detachable common stock
purchase warrants entitling registered holders of shares
of the $4.25 preferred to purchase at any time 64,750
shares of common stock at $16 a share at the ratio of 3%
common shares for each preferred share held; and 120.000 shares of $1 par common stock. Underwriters—H.
•.
Income
March
28
Foundation Fund,
filed
500,000 shares
Baltimore, Md.
capital stock.
market. Proceeds—
Business—Investment business.
Underwriter—None.
For investment.
Inc.,
(10c par)
Price based
on
International Dress Co., Inc., New York
Aug. 28 filed 140,000 shares of common stock (par $1).
Byllesby and Co., Inc. withdrew as underwriters.
Offering—Underwriters to purchase from the company / Underwriter—Otis & Co. Offering—Price $10 per share.
Proceeds—Selling stockholders will receive proceeds.
18,500 shares of preferred and 20,000 shares of common;
M.
-
•
Ferguson
(Harry),
,(4/21)t?
Detroit
Inc.,
and from Fred P.
Murphy and J. C. Graham, Jr., 100,000
shares of issued^aindToutstanding common. Prices, prefer¬
red $100 a share; common $14 a share. Proceeds—To
retire $6 cumulative preferred, pay notes, discharge a
loan. Idenfinitely postponed.
Mar. 31* filed 100,000 shares - ($5(Xpar); 4% % (mniulative
preferred and 250,000 shares ($1 par) common. TJnder'Awriters—F. Eberstadt & Co., Inc., New York, and Wat*
ling, Lerchen & Co., Detroit. Price by amendment,Apro-
m
ceed&rr-To equip and improve
land,
0.,t plant.
chinery.
V
,
Fidelity Fund,
■■■i March
28
•
e
t
—For investment.
Shares,
Inc.,
shares (no par)
i
Price based
on
Chicago,
common.
market.
Under¬
Proceeds
^300,0001 shares (10 cent par)
,
Iowa-Illinois Gas & Electric Co.
Gulf
stock,
Each
2
Underwriters—Her rick, WadYork. Offering—To be offered
stock.
dell & Co., Inc., New
publicly at $8.10 a unit consisting of
one
share of
common
one
Feb. 15 filed
Co., Baton Rouge, La.
stock.
1977.
$22,000,000 of first mortgage bonds due
competitive bidding.
Probable bidders include Halsey, Stuart & Co. Inc.; The
First Boston Corp.; Glore, Forgan & Co.; Blyth & Co.,
Inc.; Harriman Ripley & Co.; Harris, Hall & Co. j (Inc.).
Proceeds—Part of the proceeds will be used to pay mort¬
gage debt of $10,578,000 and balance will be added to
i
a
general funds,
Underwriter—To be determined by
subscription basis will be one share of Gulf States stock
Engineers common held. Price—$11.50
share.
Proceeds—Purpose of offering is to carry out
a provision of dissolution plan of Engineers approved by
v;.[
Jahn & Oilier
the Commission.
.
'
'
Engraving Co.
filed 102,000 shares ($1 par) common. Under¬
writer—Sills, Minton & Co., Inc., Chicago. Price—By
Feb. 26,
Hammond
share of class A
Proceeds—$201,2,010 shares ($100 par) preferred
stock at $100 a share; remaining proceeds,' together with
other funds, will be used for production of educational
000 for retirement of
Utilities
for each share of
of which
share of class A stock is initially convertible into
common
Status
subscription to common stockholders of Gulf States'
parent, Engineers Public Service Co., New York.
The
common
«
$100,000,000 face amount of series 15 cer¬
$80,000,000 face amount of Series 20 certifi¬
cates.
Underwriter—Investors Syndicate, Minneapolis.
Price based on market. Proceeds—For investment. Busi¬
ness—Investment business.
Business—Investment business.
Jan. 20 filed 1,909,968 shares (no par) common.
Under¬
writer—None.
Offering—The shares will be offered for
($5 par) class A stock and
'<■ 200,000 shares reserved for conversion of iclass A.
Inc.,
Syndicate of America,
Minneapolis, Minn.
Investors
March 27 filed
3
Films Inc., New York
stock.and
Industry
writing—None stated,
Inc., Boston
June 25, filed 100,003 shares
shares of
Growth
Mar. 31 filed 100,000
..
filed 300,000 shares ($5 par) capital sfock.
^Underwriters—Paul H. Davis & Co., Chicago; and The
nCrosb>r Cqrjp., Boston. Price based on mar|ket. Proceeds
—For investment.
Business—Investment business. :r
"s
Offering date indefinite.
tificates and
Business—Manufacture
...
•
recentlyVacquired Cleve¬
of farm ma¬
>
Instrument Co.,
Chicago
amendment.
Aug. 8 filed 80,000 shares ($1 par) common.
Under¬
writer; Paul H. Da vies & Co., Chicago.
Price by amend¬
ment.
Its
;;Proeeeds—Net proceeds will be used to redeem
outstanding
6%
cumulative
preferred stock at an
8
Proceeds—The shares, which constitute, ap¬
proximately 48.5% of company's outstanding
stock, are being sold to stockholders.
a
(Continued
on
cage
56)
"
common
.
''
.
)
-'a
'■
l
5$
[
(Continued from page 55)
f
/
1
March 27 (letter of
/;
Vvy.
.
n.
-•'yr"
7*,'
•
'■ >■'
;r
-
/
Class B stock.
National
par)
Nesbett
March
Corp.,
Proceeds—For payment of loans and to replace i
working capital expended in purchase of building from <
RFC and to complete construction of a
building.
(no
capital
working
For
|
.
Pigfn Whistle Corp., San Francisco
Dec. 26 filed 50,000 shares
(par $7.50) cumulative con¬
vertible prior preferred $2 dividend stock.
Underwriter s-;'
—G. Brashears & Co., Los Angeles.
Price by amend-;
Inc., New York
market.
on
shares
300,000
Proceeds
—
•
New York
For
ment.
Proceeds—23,481 shares are being issued by com¬
and proceeds will be used in connection with recent
purchase of four Chi Chi restaurants and cocktail lounges in Long Beach, Riverside, Palm Springs and San •
Diego and for working capital.
;
I
The
investment.
pany
New Brunswick
Oilfields, Ltd., Fredericton, New
Brunswick, Canada
21.
filed ;i 150,000, shares r (no par) capital stock.
D. Elwell, Boston, and W. C.
Pitfield & Co., Ltd.,,Montreal. Price —^ $5.75 a share.
Proceeds—Proceeds, together with $300,000 bank loan
and $300,000 from the Shell Co., will be used towards
the purchase of the New Brunswick Properties of New
Brunswick Gas & Oilfields, Ltd. Business—Exploration
2
and
O
April
(letter of notification) 300,000. shares of com¬
mon stock (par $1). Underwriting, none,. Price—$1 per
share. Stock will be, offered for subscription to stocks,
holders of. record March 29 in ratio of 1 new share for
each 3 shares held. Rights expire 3 p.m. (EST) April.
Subscriptions payable at Registrar & Transfer Co.,
Hector St., New York. Proceeds for working capital.
filed
Based
on
shares
696,178
Underwriter—Vance.
market.
Trust, Boston
Sanders
of
Co.
&
Boston.
Price-
Proceeds—For investment.
■Jg Mays (J. VV.) Inc., Brooklyn, N. Y.
Feb.
filed
28
($1 par)
Co., Inc., New York.
150,000 shares
Under¬
Price by amend¬
ment. Proceeds—Of the total, 100,000 shares are being
sold by seven stockholders. The remaining 50,000 shares
axe being sold bv the company, which will use its pro¬
ceeds for general corporate purposes.
&
ferred
common.
the
San
:
Acceptance
Corp.
of
Francisco
(letter of notification) $146,900 10-year deben¬
tures, 4% series.
To be sold at face amounts of $100,
and
$1,000.
Underwriter—Guardian
Securities
Corp., San Francisco.
For payment of short term notes
or for other corporate
purposes.
27 filed $125,000 5% first mortgage sinking fund
bonds, due 1971. Underwriting—None. Offering—Of the
total, $87,500 will be issued in exchange for pn ,equal
amount of outstanding 5% notes. The remaining $37,500
of bonds will be offered
March 7 filed $6,000,000 first mortgage
bonds, due 1969.
Underwriting—To be determined by competitive bid¬
ding. Probable bidders—Dillon, Reed & Co., Inc.; Halsey. Stuart & Co. Inc.; The First Boston Corp.; Harris,
■Hall & Co.
petitive
with
(Inc.).
bonds will be issued in denominations of
-
Proceeds — Net
received
be
to
from
Haddon
Heights,
sale
additional
of
bentures.
Gas Co.,
scription to
^ ' Mission Appliance
<
share.
&
Co.,
Los
Angeles.
Under¬
Price—$11.50
held.
common
Offering
—
For
stockholders in the ratio
sub¬
of $200
The debentures will be
convertible into
from May 1, 1947 to April 30, 1959.
Price—rAt
face amount.
Proceeds—For repayment of $11,500,000 of
common
loan
bank
notes.
Puritan
Feb.
Fund, Inc., Boston, Mass.
filed
3
300,000
Underwriters—Paul
shares
capital
of
Davis
H.
&
Co.
stock
(par $1).
Crosby
The
and
Price at market.: The fund is registered under
Company Act of 1940 as an open-end
diversified investment
company
of the management
type.
Proceeds—
V''
>
i,
Corp.
i
the
Investment
Northern States Power Co.
a
new plant build¬
oflirc building and for purchase of machin¬
ery and equipment.
Business—Manufacture of gas-fired
an
Proceeds—For investment.
Quebec Gold Rocks Exploration Ltd., Montreal
(Wis.)
competitive bidding.
Probable bidders include Smith,
Barney & Co.; The First Boston Corp.; Hfirriman Ripley
& Co.; Halsey, Stuart & Co. In6.
Proceeds—dompany
will apply $17,866,187 of proceeds toward the redemp¬
tion of $16,975,000 first mortgage bonds, 3^% series,
due 1964, at 105%%. The balance, together with funds
from sale of additional common stock to parent, North¬
ern States Power COi
(Minn.), will be used to reim¬
burse its treasury for previous construction and improve¬
ment expenditures.
Proceeds—For construction of
v
ing and
2%% convertible de¬
None.
principal amount of debentures for each 20 shares of
Omaha, Neb.
March 24 filed $19,000,000 first mortgage bonds, series
due April 1, 1977. Underwriters—To be determined by
Corp., Los Angeles
March 25 filed 58 000 shares ($5 par) common.
common
—
erty and facilities.
'
■j
Natural
Underwriters
Net proceeds will be used to construct additional prop¬
Michigan's parent, American Light &
Traction Co., will be used to finance its property construction
and
equipment program and to reimburse
its |A treasury {for ^.previous construction
expenditures.
writer—Lester
$1,000 and $500
Proceeds—For repayment
March 26 filed $11,077,800 15-year
N. J.
Halsey, Stuart & Co. Inc.; Kidder, Peabody & Co. Price
together!
proceeds,
the
-
Price—The
Public Service Co. of Indiana Inc.
Water Co.,
—To be determined by competitive bidding.
to
v
of bank loan and other corporate purposes.
Price—To be be determined by com¬
bidding.
funds
cbmmon shares
club members.
to
for sale at their face amount.
bidding.
Probable bidders include Dillon, Read
& Co. Inc.; Blyth & Co., Inc.; The First Boston Corp.;
Michigan Consolidated Gas Co., Detroit
>
Porcupine Club, Ltd., Nassau, Bahama Islands
itive
;
Price
Feb.
March 13 filed $10,000,000 of serial debentures, due 1956
to 1967.
Underwriters—To be determined by compet¬
r
held.
common
Proceeds—Proceeds will be used to re¬
pay short term bank loans and for working capital.
Business—Manufacture of postage meter equipment.
common.
Northern
$500
—
by amendment.
(letter of notification) 2,950 shares, $4.25 se¬
ries A preferred stock (no par).
Price—$101 per share.
Underwriter—E. H. Rollins & Sons, Inc.
Proceeds—To
retire 7% preferred stock.
Mar. 26
First Boston Corp., New"
initially will be offered for sub¬
stockholders in the ratio * of one :
stock.
Unsubscribed shares will be offered to the public.
development of oil and gas wells.
New Jersey
California,
Underwriter
(4/16)
convertible pre¬
scription to common
share of preferred for each 20 shares of
March 24
EVJercantiie
45,736 shares ($50 par)
York. Offering—Shares
Aug. 2 filed 30,000 shares of 6% cumulative convertible
preferred stock (par $10), and 30,000 common shares
($1 par).
Underwriter—Charles E. Bailey & Co., De¬
troit.
Shares are issued and outstanding and are being
sold by Maurice Cohen and Samuel Friedman, President
and
Secretary-Treasurer,
respectively,
each
selling
15,000 shares of preferred and 15,000 shares of common.
Price—$10 a share for the preferred and $6 a share for
<*A':
writer—Burr
2
NeWburgh Steel Co., Inc.* Detroit
interest.
beneficial
Pitney-Bowes, Inc., Stamford, Conn.
March 27 filed
Underwriters—William
March 7
con¬
share.
par)
estimates an aggregate offering price of $2,952,000 based on $9.84 a share which would have been
the proposed offering price on Feb. 28.
w
(letter of notification) 21,250 shares ($1 par)
on behalf of Henry E. Rohlsen, Bronx, N. Y.
Price—$2.50 a share. No underwriting. Proceeds go to
the,selling stockholder.
19
underwriters.
as
preferred. Underwriter—Van Alstyne, Noel &
Co. and G. L. Ohrstrom & Co., New York. Price—$20 a
company
New York
7
Massachusetts Investors
H-H:;
vertible
Denver*
($1 par) capital stock.
Underwriter—John G. Nesbett & Co., New York.
Price
common,
Inc.,
Fund
fifed
12
—Based
Maguire Industries,
Finance
underwriting.
No
common.
and corporate purposes.
ate- automobile business.
Latin American Airways Inc.,
Underwriters
Colo.
To establish and oper¬
underwriting.
No
li'ifi ;y:: i yiyvfi'.y
i
Pharis Tire & Rubber Co., Newark, O.
,
March 28 (letter of notification) 1,500 shares ($100
cumulative convertible preferred and 5,000 shares
'
•
vv
Co. withdrew
•
24 (letter of notification) preorganization sub¬
scriptions for 40,000 shares ($1 par) Class A common
and 4,000 shares (no par) Class B common.
Price—$1
per share of Class A stock and 10 cents per share of
March
-h\
Sept. 27 filed 100,000 shares ($20 par) cumulative
March
V
V ;''V
■
<.
.
Thursday, April 3, 1947
Business—Production and sale
of natural gas and crude oiL
Kennedy Co., Washington, D. C.
March
V -VI
HI.
cost of about $951,928. : It will set aside $150,000 for
research and development purposes and the balance will
be used as operating capital.
Underwriter—1Tellier &
and development work.
payment of notes and other debt. The
shares to be offered publicly are to be issued through
officers and directors of the company. For exploration
and mine development.
V
"
•■
-J
a
Co. the balance of ad¬
the corporation and to
general funds for payment of costs of construction
be issued for
.
;
l!"
,
add to
notification) 650,000 shares (10c par)
of the total 300,000 shares will be offered
publicly at 25 cents a share. The remaining shares are
'r
"
jf.
-
i.
.
'•
:
''V,
Proceeds—To redeem first mortgage bonds,
amendment.
common,
.
■' Ij
|
to repay Freedom-Valvoline Oil
vances made by that company to
(i
Kaaba Silver-Lead Mines Inc., Nighthawk, Wash.
to
:v,,;
;.,iJ; *:.-.V'v '
.,'\l-
•
THE COMMERCIAL & FINANCIAL CHRONICLE
(J836)v,
•
•
;UVrt\v iiUi
,
Nov.
filed
13
stock.
of
company.
Price—500 a share. Proceeds—For explora¬
tion and development of mining property.
shares
100,000
Underwriter—Robert
B.
par)
(500
Soden,
capital
Montreal,
director
Refrigerated Cargoes, Inc., New York
Feb. 3 filed 25,000 shares ($100 par) 6% cumulative pre¬
ferred and 25,000 shares (no par) common.
Underwriter
Martin
—John
Rolph, Vice-President and director of,
Price—The stocks will be sold at $105 per
company.
unit consisting of one share of preferred and one share
of
be
Proceeds—To
common.
business..
used
in
organization of
:n:'
•:
water heaters.
Oglethorpe Fund, Inc., Savannah, Ga.
•^Morris
Mar. 31
Plan Corp. of America,
filed
N. Y.
$5,C00,000 of debentures.
(4/21)
•
March 10 filed 200,000 shares of common. UnderwriterSouthern Securities Corp. Price—Based on market. Pro¬
Underwriter-
Eastman, Dillon & Co., New York. Price by amendment.
Proceeds—To retire outstanding bank loans in amount of
ceeds—For investment.
$4,080,000, with the balance applied to general corporate
purposes. Business—Consumer credit and personal loans.
•
^ Motors Securities
31
Poindexter
company
filed
Distillery,
50,000 shares
Inc.,
Louisviile,
($20 par)
5%
Ky.
convertible
•
a
finance company.
?hares of SI
13
(G, C.)
filed
Underwriter—Smith.
ment.
common
Barney &
Co.
ferred stock at $109
'
■
;
■
->:
Mutual
'
a
Plywood
Corp.,
Oakland,
($100 par)
to exchange the
Power & Light Co.
Pal Blade
-
for
5%
preferred.
new
pre¬
No underwriting.
—
F.
Eberstadt
&
225,000 shares
are
Co.,
outstanding and
stockholders, and 2,500 shares
are
are
Inc.
Offering
being sold by It
being sold by A. L
•
August 16.*,filed 4,000,000
shares
stock.; Price—50 cents
share.
&
Oil
Corp., Newark, Ohio
~ ',v'
March 28 filed $1,750,000 of
15-year sinking fund deben¬
due 1962.
Underwriter—Name by amendment.*
Probable Underwriters—G. H. Walker & Co.
Price by
tures,
aot
shares (50c par) common stock, with Sterling,
as underwriters.
Company has decided to
Co.
^
Richmond Radiator Co., Richmond, Va.
March
filed
due
$1,025,000
April
1,
4% 5-year
1948 to 1952.
Fibre
Corp.,
a
Washington, D.
(100 par)
a
new
^
•
I)
offered
%r sub¬
Co., which holds 61.3%
C.
preference
of the company's out¬
standing common, has waived its right to
pro
purchase its
rata share of debentures until the subscription pe¬
riod
for
other
holders expires on
which
debentures
they
will
will
be
be
sold
April
15.
Reynolds
subscribe for the debentures
at
offered
face
to the public.
amounts
of
$25,
The
$50,
$100, $500 and $1,000. They are convertible into common ;
to June 30,
1947.
Proceeds—Will be used to
Proceeds—The;rcomr
stock
up
of,.$1,472^,000. for
retire
$1,025,000 of the company's notes held by Rey¬
use{,estimated net pj^^eds
purchase of
be
' :
serial maturity
Underwriting—
share held., Reynolds*
such debentures for each common
after
Palmetto
will
Offering—Debentures
will have until April 21 to
drawn.
pany will
6
debentures
Metals
—
Gas
5 to
-r-
Marlman to all salaried employees. Issue may be with-
National
184,821
($10 par)
scription to common stockholders in the ratio of $1 of
(par $100). Underwriting none. Price—Preferred
$100;
$100. Offering — Securities will be offered
mainly to employees. Proceeds
For construction of
plant, purchase of machinery, etc.
common
covered
454,465 shares of common stock only, which will be
for subscription to stockholders of record Sept.i
the extent of one share for each five held. Issue will,
be underwritten
•
k
None.
bo., Inc., New York
-
March 11 filed 7,000 shares of
6% cumulative preferred
stock (par $100) and 10,000 shares of
common
stock
July 31
filed
the
June 28, 1946 filed 227,500 shares ($1 par) capital stock
Underwriters
Calif.
proposes
share-for-share
pre¬
■.
originally
cumulative convertible preferred
offered
outstanding $6 and 6%
preferreds and share-for-share plus $5 per share in cash,
for 7% preferred of the Pacific Power &
Light Co. and
Northwestern Electric Co. upon merger into Pacific
share plus dividends. Indefinitely
•/vy;'':;"■•->y..r■■■
and 277,231
Grace &
Offering—Company
postponed.
oh
'
July 10 filed 114,815 shares
ferred
(par $1).
by amend¬
Proceeds—Redemption of outstanding 4%%
capital.
Proceeds
Business—Whiskey
par.
Republic Pictures Corp., New York
Issue
stock
Price
to working
Pacific Power & Light Co., Portland, Ore.
Co., McKeesport, Pa.
250,000 shares of
be added
distillery.
.
Murphy
No underwriting. The company will use
for additional working capital.
share.
a
its proceeds
Registration
—To
Mcu;ch 25 (letter of notification)20,000 shares.of common.
Price—$5 a share. No underwriting. To purchase rare
sthrhps and to provide additional working capital. "
June
—$5
Byllesby & Co., both of Chicago. Price—At
Muller (W.),- Ct Co., Inc., New Britain, Conn.
;f
and 9,000 shares of the same stock on behalf
officers of the company. Price
($1
par) common shares into which the preferred is conver¬
tible,
Underwriters~--F. S. Yantis & Co., and H. M.
.
as
6%
cumulative preferred and an unspecified number of
Co., Inc., Shreveport, La.
ing—No underwriting. Price—$97.65 a unit. Proceeds—
For purchase of automobile time sales
paper which is
principal business
Inc.
(letter of notification) 30,000 shares ($5 par)
cumulative convertible preferred on behalf of the
of three stockholders, all
Old
Mar.
Feb. 19 filed $5,000,000 collateral trust notes.
Underwrit¬
its
Molding Co.,
Regal
March 26
f^ctory/^^^nt^gojda,
Flof, at
nolds.
..
••••••
!•
' :;7;■ V:«,
;
Volume
THE COMMERCIAL &
Number 4582
165
>./S" Rosslyn
FINANCIAL CHRONICLE
* Textron Inc.,. Providence, R. I. ,y/>.
,:A,y
' Feb. 28'.filed 300,000 shares ($25 par) 5% convertible
preferred. Underwriters—Blair & Co., Inc., New York,
preferred. Price—$10 a share. Underwriter—Miller &
Patterson, Richmond, Va. For expansion purposes.}/}/;,. and,Maxwell, Marshall & Co., Los' Angeles.- Price.,by ^
amendment.; Proceeds—For/payment of
$3,950,000 of
•
Saiant & Salant, Inc., New York
.} i/AA/A};//. bank loan notes; purchase of two notes issued by a sub¬
sidiary, Textrcn Southern Inc. in the amount of
March 28 filed 240,000 shares ($2 par)
capital stock. •
$1- 000,000 each, and for working capital. /}/;:////J//''';//'//
Underwriter—Eastman, Dillon & Co., New York. Price
Loan Co., Inc., Arlington, Va,A;(4/15)/
March 12 (letter'of notification) 20,000 shares ($10 par)
>
by amendment.
Proceeds—Shares are being sold by 13
stockholders
who
will
receive
proceeds.
Business—
Manufacture of work shirts.
"
—
.■
Solar Manufacturing Corp.
March
•
South
March
Carolina
26
Insurance
S- C.
Co., Columbia,
>
10,000 shares of cofn-
(letter of notification)
South Carolina Power Co.,
•
Southern California Water Co., Los
•
Angeles}
r
.
mortgage" bcmds/due 19^7. *
Underwriters—To be determined by competitive bidding.
Probable bidders include Halsey. Stuart & Co., Inc.; '
Blyth & Co., Inc.; Union Securities Corp.} Proceeds—
Part of the proceeds will be used to redeem $3,762,000
of outstanding first mortgage bonds at 105lA.
Balance
will be applied to capital additions.
•
Standard
Co.,
Topside
Mar. 26
;
•
f
—
••
,
.
of $53,906,590, exclusive of interest and
being offered by each will be stated definitely by amend¬
Oil Corp.,
Price—$1
a
For development work.
Publishing Co.,
Ray
.
at
:
,
24
„
•
^
^
'•.}
}/.
Inc.,
}'"'
/*
v*
,
-
-«v
•
-•
United
States
Chicago.
Rubber
(4/21)
New York
Co.,
(
.
working capital.
•"
\
;v
•
Street & Smith
f,
v.''
writers—Glore, Forgan & Co.
holders.
Feb.
•r, -
•
it
filed
per
$5
to public for preferred
per
Suburban
share. Of the
$3.50
Underwriters—Names by amendment.
$5 per share for preferred.
Under¬
Price
Underwriter—Eastman, Dillon & Co., New York.
000
shares
Paine,
000 of proceeds to pay
Co.,
short-term
Fidelity Union Trust Co., Newark, N. J.
Business—
Drive-In
Sum it
Theater,
($10
by
par)
Underwriting—To
common.
competitive
bidding.
be
Probable bidders
Halsey, Stuart & Co. Inc. (bonds); Kidder, Pea-
Cleveland,
Ohio
March 24 (letter of notification) 250 shares of common
and about 15
$29,400.
worth
or
20
Price—$2
of notes.
termined
was
The
by
Jackson
First
&
Curtis
per
share of
common
and $1 for $1
To construct drive-in
theater in Ohio.
(jointly);
Blyth
bidding.
Price—To
be
''Swfern
195,000
shares
common
Underwriter—C. K. Pistell & Co., Inc.
Proceeds—Company
Michigan operating utilities—Hough-
and
pany
is selling 45,000
holders
are
by
Initially.
$1).
a
share.
company
will
Range Light & Power Co.
The proceeds
Utah Chemical & Garb6n Co.; Salt Lake City
Dec. 20 filed $700,000
225,000
the
shares
($1
15-year convertible debentures and
par)
105,000 shares of
debentures.
The
common.
statement also
reserved for conversion
common
Underwriter—Carver
&
Co.,
Inc.,
Proceeds—From
be
applied to
Offering date indefinite.
45,000
shares
working capital':
stock
Price
is being sold by the
working capital. Debentures
'
*.<!; '•
%i'yt*
'
sold
at
competitive
be sold
inay
•*,
\
- ,v-
■.
common
bidding.r
,
'
.
Madison, Wis. /
May 21 filed 550,000 shares ($10 par)
be
fobr-"
•
■
Wisconsin Power & Light Co.,
stock t0->
Underwriters-?-By
'
amendment.
Probable bidders include
Co.;
shares
the
Dillon,
Read
be
to
are
&
Co.,
sold
erence
Glore,-Forgan &
(jointly); The Wis¬
Proceeds—Part
Inc.
by Middle
top holding company of the System,
West Corp.;
and part by pref¬
stockholders of North West Utilities Co., parent
/of Wisconsin, who elect to sell such shares of Wisconsiz
which
common
will
distributed
be
dissolution of - North West
Proceeds—For
ment and for
plant
construction,
working capital.
-
>
purchase
of
•
'
Vauze Dufault
equip- £
them
to
Utilities
upon
the
Co/ /
write^NamCf to
a
No under¬
same.
•
Wright & Glenn Co., Inc., New York
Mar. 26
1,056 shares of Class B
(letter of notification)
common on
behalf of company and 150 shares of Class A
common on
behalf of Claude- T. Glenn, President.
Price
—$250 per unit consisting of one share of Class A and
four shares of Class B
rities
are
(Individually the secu¬
common.
priced at $50
a
share.)
The company will use
its proceeds for expansion purposes.
No underwriting.
Wyandotte Worsted Co., Waterville, Me.
Feb.
26
filed
92,038 shares of
market
channels
current
market
but
the
at
New
not
York
less
Proceeds—Stock being sold by five
r
-
"■>
•*""//•/-
■
»
"
stock
common
/-
(par $5).
regular
Stock will be sold through
over
Under-
be filed' by amendment. Price—50 cents
share.} Profce^ds—F<V^£fteral operating expenses. "'/
$300,000 non-interest
Price-r-$250 per unit.
To obtain golf course property and to improve
writing.
at
($1 par) common.
Country Club, Bethesda, Pa.
(letter of notification)
Underwriter—None.
,
Mines, Ltd., Toronto, Canada
Mar/3! filed 500,000 shares
12
bearing debentures.
Price—Debentures 98; common $3.75 per share.
shares, and eight selling stock¬
disposing of the remaining 150,000 shares.
Price—$10.50
sold
(par
Offering—Com¬
Iron
will be used in connection with this acquisition program.
Boston.
stock
-
common,
'
"3:'
&
organized Feb. 26, 1947 to acquire the capital stocks
covers
& Co., Trenton, N. J.
Aug. 28 filed
privately.
de¬
County Electric Light Co.,^^Copper District Power
of
;:
1959, /
Underwriters—
common.
bank loans, to acquire additional warehouse space /
March
Corp.
Boston
competitive
and assets of three
promissory notes in the aggregate of
No underwriting.
common
Woodmorst
Webber,
Inc.;
toil
gas.
Inc.,
pay
of
Co.
Distribution of liquefied petroleum
•
par)
body & Co.; Merrill Lynch, Pierce, Fenner & Beane and
Price by amendment. Proceeds—Company will use $375,-
outstanding bank loan to National
to
consin
determined
prior to May 1,
working capital.
($1
Co., and Harriman Ripley & Co.
Upper Peninsula Power Co., Houghton, Mich.
include
Balances will be added to
•
.
A./;/. A/}';.-:'/' A'i Ay
Inc.
Proceeds—For working cap¬
ital and expansion of business.
March 28 filed 50,000 shares ($50 par) cumulative pre¬
bank loan to
//^
(
dir^^^
and to provide
per
March 6 filed $3,500,000 first mortgage bonds, due 1977;
Propane Gas Corp*, Whippany, N. J.
pay a
.
share and 200,000 are reserved for the conversion of the
.
City Bank, New York, and $250,000 to
To finance remodeling and
reserved fon offering to employees.
tures while the
30,000 shares are reserved for
common
Offering—The offering
par common
.*•.
Corp., New York, and Childs, Jeffries j&
are
officm and
.
•
ferred, convertible into $1
1957.
5,000 shares
ishare. Em--f
10,000 shares ($100 par) cumulative preferred and 180,•
.
Underwriting — Mark
share.
Inc., Boston./ Offering—Of the total
■
Coi^«y.,New York
the exercise of warrants up to Jan. 15, 1950, at
of the holdings of the present stock¬
Indefinitely postponed.
—
Stores,
shares
Colony
Thorndike
J
;
:•
200,000 shares (par $1) 35c cumulative con¬
50cj; Price
preferred.
stock.
*
Price —$100 a
50,000
First
for the company to resume
necessary
ployees will be permitted to purchase preferred at $4.50
t.. '
common
facilities expansion
25, filed.,$1,000,000 12-year debentures, due
and
the govern¬
vertible preferred and 230,0Q0 shares of common." tpar
*
Publications, Inc.
July 17 filed 197,500 shares of
a part
\
Ptoceeds-rTo provide additional work-
U. S. Televlslon Manufacturing
-•
..
^
represents
makes
Nov. 4
Proceeds—For additional
**/
••
•
Whites Auto
The company said termination of exclusive
industry. .../V, .^;/.
,
Business—Manufacture of slide fast¬
//"'A
eners.
$7,500,000
a
By amendment. .Proceeds—Company is selling the deben¬
Unsubscribed shares of preferred will be
offered publicly at $10 a share.
smaller num¬
$6,500,000 together with
alterations of the premises.
Underwriter—Floyd D. Cerf Co. Inc.,
Offering—The shares initially will be offered
held.
a
its proceeds estimated
use
loan, toward payment of its promissory notes and
Rafalsky & Co., Djfew York.
$40,000,000 20-year 2%% debentures, due
financing of purchases in the Far East; BiisiHess-^-Rubber
parent/«
common
ing capital.
ment
■
New York
share of preferred for each 30 shares of Segal
one
of
presently stated
Underwriter—Kuhn, Loeb & Co.; New York; 'Price,
control of the purchase of natural rubber by
for subscription to common stockholders of Segal Lotk
of
Company will
minimum
a
bank
of shares
offering consists of
to finance company's equipment and
Madison, Wis.
Inc.,
31 filed
by amendment.
-
March 25 filed 25/000 shares of,60 cents cumulative convertible preferred.
number
(letter of notification) 550 shares
1967.
Co., Youngstown, O.
Fasteners
total
ber of shares.
To be sold through direc¬
share.
and the
will be reduced, if the
Denver
common.
•
'•
...
*
•
;
■
a
(letter of notification) 2,100 shares (no par)
Price—$100 a share. Butler, Wick
Ohio, dealer. For expansion of
Strauss
.
program now under way.
($100 par)
•■"/// •'
Z/^;"'A/''"/.■/:?.;// \-'yv V"'
common.
Being offered on behalf of common stock- }'//'/•r •/»■ / '///••;/'
•
Westview Apartments, Inc., New
holders of the company. Price—$100 a share. No under- f
♦York:}
March 25 (letter of notification) 580 shares (no par)
writing.
Youngstown,
business.
■■%/.;.J'* \r'
by
equipment, particularly soda fountains, commercial refrigerators and frozen food cabinets, .•'/'/•% .</•;//://■"/"
-
(letter of notification) 70,000 shares (no par),
Uncle
March
cumulative preferred.
Co.,
be
offered publicly through under¬
amendment.
Proceeds—To .reduce
to retire a purchase money trust deed
note. ' "Business
Manufacture of store fixtures and
Mar.
&
shares, will
.
ment for railroad freight cars.
17
Mar.
ment
$1,500,000 bank loan.
The remaining
365,000 shares are being sold by certain stockholders.
Business—Manufacture of metal roofs and other equip¬
March
'
Co., Inc., Los Ang.
.
v
tors of the company.
UnderCo., New York; and The Illi¬
Price by amendment.- Proceeds—
proceeds from the sale of 135,000
State Finance
Fix.ure
.
common.
March 28 filed 500,000 shares ($1 par) common.
shares to retire
Weber Showcase &
.
•
writers—Smith Barney &
Co., Chicago.
Company will use
©
West- Coast Airlines,;
March 28 (letter. of.
Inc., Seattle, Wash.
/
notification) Clarence W. Miller, *
Chicago, who will solicit and obtain preorganization sub-/* Sept. 2 filed 245,000 shares ($l^pary common. Under¬
scriptions to common stock of Illinois corp. to be formed *. writer
Auchincloss, Parker & Redpath., Washington.
under the name of Tiny Tot
D. C. Price—$7 a share. Proceeds—To
Safety Table Co. Preorgan¬
repay short term
ization subscriptions for 55,000 shares of
bank loans for aircraft communication
$1 par common../
equipment part *
Price—$1 a share. -No underwriting. ' For organization
and shop facilities and for
working capital V /"'/. •. '/ /
and operation of business.
* s
/
A
*
/-? />
/;///•.,
rv->/ f-'':' :.v,/.■»•*/•}/./;.'*>;•
•" v
/'/ /•'*//* :*/A/v yA/*//"//
"*"" $
•
r*/-i
^
; /}■:/' 1''^};/-}.} A •.}/././'"*.•'
f \ .'.f I
' \'J- 'i
West Star/Mining Co.,
Coeur>dvAlene, Idaho* ' /./
Toledo (O.) Edison Co.
March 28 (letter, pf notification) 200,000 shares of com- \
Oct. 25 filed $32,000,000 first
mortgage bonds, due 1977; ' ipon. Pric^^-50 cents a share. No underwriting. For ex- *
and 160r000 shares of ($100 par) cumulative
preferred.
ploratory work. Equipment and supplies in .connection
Underwriters—To be determined by competitive
with prospecting holdings cf the*
bidding.
company.
• /
Probable bidders include The First Boston Corp.;
Halsey, • /•/ vy ..,e.;/ r,../•-•v.-;" *■;;:*
■///./>; '>■;
Stuart & Co. Inc. (bonds only); Blyth &
Western Air Lines,. Inc.
Co., Inc.; and
/A: *;v./r.//•• /
Smith, Barney & Co. Price to be determined by competi¬
Nov. 27 filed 1,200,000 shares ($1
par) capital stock.
tive bidding. Proceeds—Net proceeds together with $4,Underwriter—Dillon, Read & Co. Inc. Price by amend¬
500,000 bank loan and if necessary, the $5,000,000 to be
ment.
Proceeds-—Offering consists of an unspecified.,
contributed by its parent, Cittes Servicfe Co., will be used % number of shares
being sold by the company and by
to redeem outstanding debt and preferred stock, involv¬
William A. Coulter, President and Director. The amounts
a payment
dividends.
Chicago
nois
Pro¬
mining
property.
Business—
Acquiring and developing mining properties.
A/ /,
70,339
Tiny Tot Safety Table Co., Chicago
ing
Manufacturing
Railway Equipment
//;/
share.
a
y
Un¬
ceeds—For. developing
writers. / Price
bank loans and
,
-
first
March 28 filed $5;lO0,t)O0
Price—25 cents
yet.
as
capital stock.
par)
remaining
selling the stock and also are the principal under¬
They will engage others to sell the stock. Offer¬
ing—To the public.
Price by; amendment.
Proceeds—
Proceeds go to the selling stockholders. Business—Publie utility. ■:
*
/
*-■ »_vr
■ /*->./
•.
writers.
'.-•
derwriter—None
($i
31 filed 87,010 shares ($5 par) common.'
Under¬
writers— Nam§ to be supplied by
amendment.Offering
—Of the total, 16,671 shares will be offered for
subscrip" tion to Weber's common stock ho: ders on the basis of one
new share for each five
presently held. ' The
Wilmington} N; ;C*> A
»
Charleston, S. C.
Mar.: 31; filed 2.00,000 shares (no par) common. Under¬
writers—To be determined by competitive bidding. Prob- ;
able bidders include The First Boston Corp.; Harriman 1
Ripley & Co.; Morgan Stanley & Co.' Price to be deter¬
mined by Competitive bidding; i Proceeds—To reimburse
its treasury? funds expended for property improvements.
Business—Public utility;
-
Power, CP.;*
Victory Gold Mines Ltd., Montreal, Canada/
v
Nov. 13 filed 400,000 shares
—
Price—$17.50 a share. /No underwriting. Proceeds
—$100,000 to capital stock and $75,000 to surplus.
//,./'
mon.
•
Water
are
19
(by amendment) filed 110,000 shares of 75c ;
cumulative convertible preferred stock, series B (par $5) Underwriters*-Van Alstyne, Noel & Co. Price per share
$12.50 Proceeds—Net proceeds will; be applied to re¬
demption of bank loans and to cover part of cost of/
expansion program. - A: / ■-/A/A/Y
A:AA'Av,
#.£
'■/ •
?■<-; j•/<♦*. •'
/ ': / * >'"*■■>' <•*' f /
./ >'•'
•
Tide
Mar^srfiled"157,868 shares (no par) commom Underwriters—W. C. Langley & Co. and Union Securities
Corp.
;
c
(1837}-57
.
,'
(Continued
than
pare
Exchange
$10 por share.
stockholders.
./
cn
Stock
53)
-
.(
"
^'
58
the commercial & financial chronicle.
(1838)
Prospective
.
„
Thursday, April 3, 1947
Security Offerings
(NOT
•
.
,
..
INDICATES
YET
IN
REGISTRATION)
ADDITIONS
SINCE
PREVIOUS
ISSUE
(Only "prospectives" reported during the past week are
given herewith. Items previously noted are not repeated)
Chicago, Indianapolis & Louisville Ry.
(Continued from page 57)
authorized common stock
Mar. 5 stockholders increased
ceeds to be used to finance not
Approxi¬
600,000 shares (par $1).
from 400,000 shares to
Probable
reported
19, stockholders voted
a
new
•
preferred issue in
a $16,000,000
expansion program. Details
issue not yet available, but company con¬
templates refunding 336,088 (no par) shares of $2.40 and
$2.20 outstanding prefered either through an exchange
offer
planning sale of $4,000,000
or
by call.
be
to
rate
bidders include, Dean
•
Chesapeake & Ohio Ry.
rate is to
purposes.
Electric
be determined
by competitive bidding.
presently at $25,000,000, of
$11,000,000 is to be spent in 1947. Probable bid¬
new securities include
Halsey, Stuart & Co. Inc.
(bonds); Blyth & Co., Inc.; Lehman Brothers.
ders for
■
.
y,-
e
Southern
March
26
California
California P.
Salomon Bros.
a
•
&
Erie
Railroad
ICC for authority to issue
$5,440,000 equipment trust certificates. Bids for purchase
equipments will be received
able bidders include
up
to April 15. Prob¬
Halsey, Stuart & Co., Inc.; Salomon
Bros. & Hutzler.
Government,
•
Fairbanks
Morse
stocks
U.
'!•? 4l-5
>
v
'
.Xfr
■■
Ltd.
issue to provide funds for two plants and for increased
connection with
Commission
new
approved
com¬
classes of preferred
its proposed
stock/The Commission exempted the new securities from
the Commission's competitive bidding rule and com¬
invited The First
Boston Corp. and Harris, Hall
(Inc.) to manage the underwriting and exchange
offerings. The proposed refunding plan will involve the
issuance of new securities totalling more than $95,000,000. Under the plan it is proposed to issue and exchange
or
sell 1,653,429 shares of new cumulative preference
and new convertible preference voting stocks. The new
&
Co.
stocks
Co.
March 26 company is working out details of a debenture
in
plan for retire¬
through exchange or call, of all of its presently out¬
standing preferred series B 6% stock and series C 5%%
pany
(4/15)
Mar. 26 company applied to
State, Municipal and
•-
Edison Co.,
ment
The balance will be applied to the
redemption
part of the $65,000,000 in unsecured > short-term
bank loans executed recently by the company.
(EST) April 15
Cqrp.
The 1946 annual report states that
company is preparing
a financial program to provide funds for its construction
pany's application to issue two
of the
United States
financing for such
Rochester Gas &
which
of
;
Hutzler.
financing.
due 1948.
(4/15),
Inc.;
new
be applied to the redemption of $60,000,000 Consolidated
Edison Co. of New York, Inc., 10-year 3V2% debentures
extensions.
Co.,
&
Inc.
Co.
Inc.
■,
for the purchase of
$1,650,000 equipment trust certificates. Probable bidders
Stuart
York,
Probable bidders include Morgan Stanley & Co.; Halsey,
Stuart & Co., Inc.
Proceeds received from the sale will
at 3400 Terminal Tower, Cleveland,
Halsey,
New
as
program which is estimated
terest
ask stockholders
Company will receive bids up to noon
include
of
company petitioned New York P. S. Commission
authority to issue for refunding purposes $100,000,000
in first and refunding mortgage bonds, Series B, due
April 1, 1987. The price of the bonds as well as the in¬
amendments to.certificate of incorporation as
forerunner to finance property
Co.
Machine
for
California-Pacific Utilities Co.
April 2 reported company proposes to
to approve
Edison
company's needs require.
April 1
Otis & Co. (Inc.).
•
Consolidated
stock
Rayonier,
•
•
•
as
American
29
some
Probable underwriters, Putnam & Co.;
Co., and Estabrook & Co.
Chas. W. Scranton &
competitive bidding the
specified in the bids. Probable
Witter & Co.; Blyth & Co., Inc.;
8
April 2 Edward Bartsch, President, states that company
has no immediate financing
plans, but should securities
markets show improvement and if the
company could
get additional suitable timberlands, it would consider
connection with
of proposed
preferred stock to be sold at
dividend
H&
Mar.
Halsey, Stuart & Co., Inc.; Salomon
Connecticut Light & Power Co.
March
Power Co.
Electric
California
bidders:
•
common
rate purposes.
•
reported that in connection with proposed re¬
capitalization plan company may sell 208,000 shares of
•
authorized
par). In¬
crease is designed to provide for possible new capital
investment, retirement of indebtedness or general corpo¬
March 31, company
from time to time
Bros. & Hutzler.
April 29 stockholders will vote on increasing
common from 450,000 to 700,000 shares (no
com¬
(no par) from 400,000 shares to 500,000 shares. The
100,000 additional shares would be reserved for issuance
mon
75% of the purchase
an
Co.
Powder
Atlas
over
General
price of 22 diesel-electric locomotives, to be acquired at
estimated cost of $3,765,500. Bids will be received
at office of company, 608 So. Dearborn
Street, Chicago.
mately 1X6,000 shares will be offered for subscription to
common and preferred stockholders at $2.50 per share.
Proceeds—For expansion and improvements.
•
•
Time Instruments
Corp.
April 1 stockholders voted to increase authorized
(4/7)
Company is inviting bids to be opened noon (CST) April
7 for $2,800,000 of equipment trust certificates, the pro¬
Co.
Manufacturing
Asbestos
•
would
series B 6%
be
offered
in
exchange
for the
present
and series C 5Vz% preferred stocks on the
new issues for each V
basis of one-half share of each of the
sales volume. Part of the money will be used to
purchase
Co.
Blair
-:'v •
man
INC.
BUFFALO
•
PHILADELPHIA
•
•
PITTSBURGH
government
during the
of
two
plants
operated
by
the
Probable underwriter, Harri-
war.
Ripley & Co.
new preferred stocks will be
proceeds used for the redemption of the old
preferred. ' 1
;
sold
•
•
CHICAGO
•
exchanged portions of the
the
company
NEW YORK
BOSTON
share of the old preferred. Unexchanged portions of the
old preferred would be called at $28.75 per share. Un¬
from
Corporate Securities
ST. LOUIS
CLEVELAND
•
•
SAN
General
Public
Utilities
Mar. 28 A. F. Tegen,
FRANCISCO
that
*
and
Sylvania
Electric
Products,
Inc.
/
Mar. 29 reported company
Corp.
President, in annual report stated
financing is required to meet heavy construc¬
tion requirements.
new
planning equity financing to
providedunds for expansion and working capital as soon?
as
market conditions are favorable.
Probable under¬
writers include Paine Webber, Jackson & Curtis, White,
Weld Co., Lee Higginson Corp.
/
,
closure" rule
was
announced
ment follows:
Bid-and-Asked Disclosure Rule
v(Continued from page 3)
/ 1
disclosure by over-the-counter dealers of
prevailing market
quotations when effecting transactions in 'exempt securities,'
a phrase which includes
'muncipals'."
"Inquiries have been
yesterday. The complete state¬
received
by the Commission from
regarding the disposition of a Proposed Rule
X-15C1-10 under the Securities
Exchange Act of 1934 which
was circulated to the
public for comment in 1942. The rule
would have required
every dealer executing a purchase or
time to time
sale in the over-the-counter market to disclose
to his
tomer the best
independent bid-and-asked
cus¬
price ascertain¬
Industry comment on the full disclosure rule received able upon the exercise of reasonable
diligence or the fact
by the SEC on its own solicitation back in 1942 was pre¬ that no such bid-or-asked price could be so ascertained.
dominantly opposed to the proposition. The dealers argued
"The Commission has received numerous
inquiries with
that the rule, if put into effect, would reduce their earnings
respect to the status of 'municipal securities' under
and jeopardize their very existence. They reasoned that
any market disclosure rule which might be adopted. The
there was no justification for singling out the securities bus¬
Commission believes it has no
authority upon either Section
iness for this kind of treatment.
They felt there was no 15C-1 or
any other section of the Securities Exchange Act
more reason for them to disclose their "inside" or wholesale
of 1934 to adopt a rule
requiring general disclosure by the
prices to their customers than it would be for merchants in over-the-counter dealers of
prevailing market quotations
other lines of business to do so.
when effecting transactions in
'exempt securities' a phrase
Our
readers
will
recall
that
it
was
the
"Chronicle"
which includes
'municipals.'
Food
Machinery Stock
And Debentures Offered :
The Food Machinery Corp. is 1
publicly offering today $8,000,000/
of 2%% sinking fund debentures %
due March 15, 1962 at a price of
100%% and 70,000 shares of 3%%,
cumulative
convertible
preferred'/
stock, $100 par value, at a price of ;
$101 per share.
Kidder, Peabody
&
Co. and
Mitchum, Tully & Co.
have underwritten the
offering, pi;
the debentures and are
group
of
investment
heading
a l
ban king'-
firms through which the preferred ' f
stock is
being offered.
Proceeds from
new
the
sale
of
then:
securities will be used to
imburse
working
re-!
capital for ex^ry
penditures made under
a program
of capital improvement^ and ad-?£
which, back in 1942, launched the fight against the SEC's
"Section 15C2 of the Securities
Exchange Act of 1934 ditipns, to provide for additional o
attempt to force such a disclosure rule upon the over-theexpressly provides for rules which 'prescribe means reason¬
counter market, thereby helping to crystalize industry-wide
expenditures for similar purposes, ■'
ably designed to prevent fraudulent, deceptive or manipulato provide for a
opposition to the scheme. Since then we have carried in¬ tive
$4,700,000-re-*//
practices' or fictitous quotations in the over-the-counter
numerable articles attacking the proposal as being vicious
negotiation refund to the Gpyerp- \
market. However, no rule
adopted under 15C2 could apply ment, and to repay substantially
and un-American and have published column after column
to transactions in
'exempt securities', since they are explicit¬ all of the $8,000,000 of bank! loans
of comment from dealers agreeing with our
position and ly excluded from that section. As a result of
the comment incurred in
connection, with the'
indicating the devastating effect such a disclosure rule would received in 1942 the
Commission decided not to adopt Rule
program.
'u 7\have on the securities business.
It is still the opinion of the X-15C1-10."
y
editors of this newspaper that legislation should be
enacted,
^
possibly
amendment to the Securities Acts, preventing
as an
the SEC from
compelling over-the-counter dealers to
disclose their inside
tomer unless
i
Decision
Henry B. Boland Dead
With H. Hentz & Co.
(Special to The Financial Chronicle)
ever
they
of
or
are
the
CHICAGO,
wholesale prices, or profits, to a cus¬
acting
SEC
to
Monheimer
on an agency
abandon
the
basis,
r
proposed "dis¬
of
H.
Hentz
La Salle
ILL.
has
&
Street0
—
joined
Henry
the
Co./ 120
:
With Robert F. McMaster
Henry
(Special to The Financial Chronicle)
I.
staff
South
CHICAGO, / ILL.
Wilson
is
Master &
Street.
*
with
—
William
Robert
F.
F.
Mc¬
Co., 135 South La Salle
,
,
!;
Boland,
B.
partner
in;
Boland, Saffin & Co,, 52 William
,
Street,
New
York
City, died
April 1st at the age of 68. He
a
N.
resident
J.
'
of
Monmouth
on
was-
Beach,
.
,
Volume. 165
Number 4582
THE COMMERCIAL &
FINANCIAL CHRONICLE
(1839)
get ; additional
pany
timberland,-jit
Our
some
financing
for
Estes, Snyder Elects
such
pur¬
Carl E. Harris With
Harold P. Lowe V.-P.
consider
'
poses."
s
Leonard J. Fertig & Co.
.v'v-—,
On the Second Leg
Reporter's
Report
is
definitely
ing
venture,
of
the
market suggests- a
degree
uncertainty rules in most di¬
rections the situation here has
nature to
a
the
floated at
On
the
the
contrary
definitely taken
renewed
doubt,
vigor
the remarkably
reception
being
corded
they
new
U.
no
by
j vorable
i
spurred,
which
fa-
the
SEC
issues,
for
some
in
keeping with
registered with
issue
.
of
be
in
normal
than
and
turnover
existed
and
sold
panies to meet with the divest-
last year to finance
acquisi¬
and
plantation rehabilita¬
tion among other
ment and
tions
similar
issue
was
house
to
by
make
of
on a
which
sold
common
of
bonds,
Maine
Public
Service
Vice- Presii d e n t
and
Manager,
Co.,
capital stock sold by the Consol¬
Public
idated
tions. Mr^Geil
other
Electric
&
Gas
Co.
day.
•
*v
.
.
Don't
make
of
the
See
Eye to Eye
world
go
representative
are
around
in the depart¬
ment of pub-
what
from
financial and investment
point
view. This was vividly indi¬
cated
^by
pursued
the
divergent
corporations
of the last
course
in
da,y
one
its
diana)
the
on
shares
of
preferred
and
issue
an
new
$3.75
stock,
offered
of
tion
of
state
World
Bank
banks.
priced
at
to
Lloyd H. Geil
par
pro¬
indications this
he
i
a
e
and
issue
public relations.
graduate of North Central
a
College, Naperville, and holds
a
master's degree from Northwest¬
widely and in no ern
University. J. Mills Easton,
measure
by
institutions Second
„
small;
Vice-President,
when the books opened.
On
ican
the
other
to
hand,
Amer¬
Locomotive
Co.,
which
registration for 100,shares of new preferred
serve
as
last July, this week asked SEC
to permit withdrawal of its
reg¬
istration, explaining that di¬
rectors felt it would not be to
the best interests of the com¬
held with
Iglehart Director
J. A.
the
firm
W.
New
of
Iglehart,
York
a
partner in
Stock
Exchange
W. E. Hutton &
Co., has
•
According
:
any
in
$16,-
arket
conditions
to
1
all
call
for
jiat the time is
i
the problem;
tated
'no
that
financing
uture."
company
plans for the
(Special to
SAN
near
markets
nwement
and
show
could
im-
the com¬
on
its $3
Non-Cumulative First Preferred
Stock, 50c per share on its 50c
Non-Cumulative
Second Preferred
Stock, and $3. per share on
its Preferred Stock
able
at
April
the
19,
($50 par value); all
pay¬
to stockholders of record
1947,
close
of- business
on
W.
Vice
April 7, 1947.
BURTON,
and Secretary
J.
Pres.
NATIONAL DISTILLERS
PROI1UCTS
on
The Board of Directors
has declared
1947. The transfer books will
share for the second
at
FUND,
Ordi¬
Goodyear Tire & Rubber
Distribution No. 35
nary
Co.
per
By W. D. Shilts, Secretary
Akron, Ohio, March 31, 1947.
share
income
from
and
an
regular
of
Stock
Exchanges.
CALIF.—
and
San
He
Francisco
ized
security
Extraordinary Distri¬
15, 1947
profits
payable
to holders of record
the close of business
berg.
FACTORIES
YOungstown
Albert W.
has
YORK, INC.
Conshohocken, Pa.
with
COMPANY
-
Chronicle)
Street.
Mr.
Mc¬
recently been asso¬
Gross, Van Court &
trader.
as
O TI S
ELEVATOR
LEE TIRE ft RUBBER COMPANY
LEE DELUXE TIRES AND TUBES
CALIF.—Al¬
McCready has rejoined
the staff of
Conrad, Bruce & Co.,
Sixth
STREET, NIVf YORK 3, N. Y.
OP NEW
LOS
ANGELES,
bert W.
West
WALL
REPUBLIC RUBBER
McCready
The Financial
48
CONSHOHOCKEN
youngstown, Ohio '•
INDUSTRIAL RUBBER PRODUCTS
.
Rejoins Staff of
Conrad, Bruce Co*
(Special to
*
DIVISIONS
■
;
The Board of Directors has this
day
declared the regular
quarterly divi¬
dend of 50c per
outstanding
share
on
stock
of
the
the
the
capital
1947, to stockholders of
at
the close of business
Books will
not
Common Dividend No. 158
A dividend of 25^ per
no
29,
at
share
FRANCISCO,
C.
Elliott
with
San
has
Bacon
to
stockholders
the clore of business
Street,
Francisco
Checks will be '/nailed.
C. A". Sanfobd, Treasurer
New York, March 26, 1947.
Stock
was
—
Co.,
256
members
and
Los
with
El¬
Dean
An annual
the
opening
office in New York.
Company
declared
dividend of $1.2 5
per share has been
by the Board of Directors
standing Preferred Stock of
N. Y. Office for Int'I
Fund Under Consideration
consideration
The Weatherhead
An¬
Exchanges. Mr.
formerly
of
of
an
the
on
the
April 15, 1947,
to
stockholders of record
on
April 1, 1947.
March 13,1947
out¬
Company, payable
close of business
Cleveland, Ohio
of
on
April 5, 1947.
April 15,
be closed.
CALIF.
become affil¬
&
on
value Common Stock
declared, payable April
1947,
record
record
Treasurer
March 27,1947
par
has been
Corporation, payable May 1,
1947.
WASHINGTON—The Interna¬
Corporation, the Rotary
Company of De¬ tional Monetary Fund has under
Broad¬
of
CORPORATION
F.
Steel
troit, and the Columbia
casting System.
April
as
April 3, 1947.
LEE RUBBER & TIRE
Young-
Iglehart
National
Gypsum
cents
investment
bution of 4 cents
per share from real¬
,,<■
; The
in the
was
past
connected
with
Henry
Swift & Co. and Stone &
liott
Electric
8
in Rubber
Witter & Co.
been elected a director of
Frank¬
lin Simon & „Co,
Mr. Iglehart is
also a director of the
inc.
The Bogrd of Directors of
Manhattan
Bond Fund, Inc. has declared
the close of business
Name
The Financial
Chronicle)
York
geles
J. A. W.
7
w
treasurer
.
BOND
May 15, 1947.
The
close.
MANHATTAN
$1.00
per
share upon the
Common Stock, payable
June
16, 1947 to stockholders of
at
not
the close of business
May 15, 1947.
record
quar¬
THOS. A. CLARK
March 27, 1947.
of 1947 upon the $5
Preferred Stock, payable June
16, 1947 to stockholders of
record
a
the out¬
standing Common Stock, payable on
May 1,
1947, to stockholders of record on
April 11,
today the fol¬
lowing dividends:
per
CORPORATION
The Board of Directors
has declared
terly dividend of 50? per share
NOTICE
Greatest
FRANCISCO,
Montgomery
sure
But, he added, "should
securities
DIVIDEND
etc.
New
the
man-
had
share
tmAui
Joins Davies and
iated
right,
the
corporation
March 27, 1947
of Directors of
this Corporation
declared
a
dividend
of
$3.
per
Board
today
Mejia Staff
SAN
additional
President,
NOTICES
coal
(Special to The Financial
Chronicle)
such
At the Ray oilier, Inc. session
Edward Bartsch,
valley
DIVIDEND NOTICES
vis-a-vis the Fund; the nature of
With Bacon & Co.
meetings
pital. But quite evidently
ement is not
altogether
has
A. S. POUCHOT
being held, it has been indi¬
ted 'that more than a few
cororations contemplate expansion
would
requests.
Considera¬
Whether the Fund can
necessary staff mem¬
bers; the position of the member
ow
hich
sys¬
the
spare
Earl
annual
mem¬
such
are:
ciated
(
At the various
DIVIDEND
lehigh
quarter
Monetary
The Fund has not acceded
tions
Co.
justified
Mining
'
MIAMI, FLA.—Donald D. Burr
has become associated with Bache
& Co., 96 N'. E. Second
Avenue.
$1.25
reforming their monetary
tems.
Many companies have things in
ind and probably would move
uickly if they felt prevailing
ction.
CALIF.—
Exchange.
a
it is pointed out,
case,
WASHINGTON—Several
Cready
It All Depends
•
to
bers of the International
Monetary
Fund have requested its
assistance
530
pany to go ahead with the pro**
gram now or in the near future.
-
the part
FRANCISCO,
P.
(Special to The Financial Chronicle)
continues
ing, a position he has
the bank since 1926.
Leo
—
With Bache in Miami
manager of advertis¬
went into
000
in¬
Reform Sought by Members
d
director of
He is
SAN
Aldo Cincotta is with
Aurelius F.
de Felice, 145 Sutter
Street, mem¬
ber of the San
Francisco
reversed.
was
t
Chronicle)
CONN.
the
absorbed
was
bonds
on
Michigan State College in Walton T.
Hildebrand has become
East Lansing. There he
was head
associated with Davis &
of the department
Mejia,
of publications Russ
Building, members of the
purposes.
all
years
to The Financial
ac¬
For ten
asso c
vide funds for general
corporate
From
with
With A. F. de Felice
The
World Bank source, Ohio
bankers
expect that this action will be
with
dividend
yesterday
to
bank.
the
250,Ood
Oil
cept his posi¬
hand, brought out through
bankers
relations,
Company (In¬
two.
or
c
Standard
courses
Atlantic Refining Co..
f
l i
by two of the larger in¬
dustrial
Rela¬
recently
re¬
signed as field
'
Differences of opinion
a
the
(Special
the Ohio State
motion from the
000,000.
preferred and
big block
At Coburn & Middlebrook
Distilling Industry-
(Special to The Financial
Chronicle)
,v
week the
ex¬
stook. and the
Harold
—
Lewis Street.
CHICAGO, ILL.—The Northern
ample the multiple sale by New Trust
Company, announces the
England Gas and Electric Assn.. election of Lloyd H. Geil, Second Fund Advice for
for
as
OHIO
Roberts
has
become
associated
with John E.
Joseph & Co., Inc.,
18 East Fourth
Street.
Mr. Rob¬
erts
was
formerly with Westheimer & Co. for
many, years.
Prior thereto he was
with the
Cincinnati Stock
Exchange.
:C
capital and
surplus in World Bank securities
and
exercise the
authority, the
total would be
only about
the several such deals which
week
.
large majority, voted
a
Beverage
Facts
and
Figures
1934-1935—
Licensed Beverage
Industries, Inc.,
Research & Statistical
Bureau, 10
East 40th
Street, .New York 16,
N. Y.—paper.
Chronicle)
Begley, Jr. has been added to the
staff of Coburn &
Midlebrook, 37
eligible for investment
In
latter phase has been
pro¬
viding investment bankers with
substantial opportunities as wit¬
this
■
if Ohio state banks are
authorized
to invest 10% of their
The
developed
floor
things.
integration provisions
of the law.
ness
:';Vr
Legislature,
to
year.
A
& Co. for
many
WASHINGTON—Last
inven¬
war
Edwin
—
associated
Ohio And World
Bank Bonds
receivable
during the
OHIO
become
formerly with Otis
need¬
Bookshelf
Wm. E. Shumaker & Co.
CINCINNATI,
Chicago investment firm
Clement, Curtis & Co., mem¬
lower
in
was
Co., Inc., and in the past with
HARTFORD,
and some growing out of the ef¬
forts
or
utility holding com¬
l
&
Financial
bers of the New York and
Chicago
Exchanges. Mr. Hale was
just
return
accounts
has
years.
are
of
consequence
tories
new money,
Harris
Man/s
Exchange.
Mr.
formerly with Slayton
Stock
war.
Additional funds also
Hale
of
$40,000,000
last
some
Stock
IND.—Carl v E,
Harris has become associated with
Leonard J. Fertig &
Co., Berry
at Court
Street, members of the
Harold Roberts with
Joseph
(Special to The
with the
debentures
marketed by a
which is double that
more
for
Mu¬
In the
(Special to The Financial
Chronicle)
CLEVELAND,
,
ed
refunding,
an
before the
,
new
charge of the
Chicago
Business
Chronicle)
WAYNE,
number of years;
a
V.
20-year 2%%
will
ness
money debentures last week has
been
conducive to fresh confi¬
keting of
in
Clement, Curtis* & Co.
which
the
company
considers
essential to handle present busi¬
new
Accordingly many firms have
moved to proceed with the mar¬
asso¬
Edwin V. Hale Joins
Proceeds will be used to pro¬
vide additional
working capital
Consolidated Edison issue of a
fortnight ago and then American
,
for
which
as
ket absorbed first the
$100,000,000
dence.
Rubber
of new
mar¬
Telephone's $200,000,000 of
Sixth
the
past Mr. Lowe was with the
firm
for
group of 80 underwriters.
with
ease
West
them of Harold P.
his election as Vice-
and
President
future date.
a
expectations, has
appear.
;Jk The
S.
ac-
underwritings
217
announced
nicipal Bond Department.
fronds.
U. S. Rubber Plans
signs of
on
Lowe
latter
phase of the securities business
has
the
long-term
outstanding, leaving a final
$90,000,000 of new securities to be
mar¬
ket.
i
new
Inc.,
with
The Financial
FT.
debts
put the
issue
new
asked
Co.,
ciation
issue would be applied with com¬
pany cash and 'bank loans to re¬
tire
$194,541,000
of
of
on
having
&
Street, have
Proceeds of this portion of the
stock
"damper"
on
Public Service Commission to
ap¬
prove issuance of another
$100,-
000,000 of
hot been of
der
the second leg of its
big refinanc¬
:
Although the behavior
launched
(Special to
TOPEKA, KANS.—Estes, Sny¬
Consolidated Edison Co. of New
York
59
suitable
would
at
the
.
MORRIS H. WRIGHT,
Treasurer
.
60
THE COMMERCIAL & FINANCIAL CHRONICLE
(1840)
!
Europe
United States.
many
production
International Trade differs materially from
90% above
and real
;
prev/ar,
consumer
In spite of a 55%
increase in the cost of living since the prewar
of 1935-1939, the total real purchasing power of current incomes
is sufficient to
fore
buy
that
followed
World
<
contents
\
see
3
page
*
war, according to an article in the April
Northern Trust Company's "Business Comment."
The
War.
Brussels and
For detailed index of
quantity of goods almost 60% greater than be¬
edition of The
a
the
the first ♦>
Reasons for this increase in .consumer purchasing power lie,
conference of position to face a series of trade
coal.
In
Genoa did not aim deficits, they are anxious to pre¬ of
1946,
they
got^
——
serve their strength, if necessary,
at anything beyond passing a se¬
according to the article, in tne equipment and other supplies and
ries of resolutions laying down by means of "artificial" trading large increase in income payments services are also a part of the total
to individuals which have recently demand and are still important.
the principles that were to guide arrangements.
There seems to be no clear at¬ been
the Governments in their policies.
running at the rate of $175
The maintenance of production
No international agreements were titude discernible in any of the billion annually as compared with on an even keel
depends not only
None of a $67 billion average for the five
arrived at and none were con¬ continental countries.
on
the matching of the flow of
them
are
keen
on
taking the prewar years. Though taxes paid
cluded.
The participating Gov¬
consumers' goods and the amounts
ernments were at liberty to de¬ olunge by reverting to free trade by individuals are heavier ($20 available to consumers for
spend¬
and hoping for the best. There is billion
annually now against $3 ing on these goods, but* also on
part from the principles laid down
to
be a great deal of.
in the Brussels and Genoa resolu- bound
the matching of the output of capi¬
pillion prewar), income available
tions.
At Geneva, however, the hard bargaining for safeguards, for spending (after taxes) is still tal
goods and the amount available
Governments are expected to en¬ whether in the form of interna¬ almost 2.% times prewar.
to business from profits, depre¬
ter into definite and binding com¬ tional organizations and arrange¬
Industrial
production,
mean¬ ciation reserves and Sale of secur¬
regulating the flow
of
mitments. For this reason, public ments
while, has been- running 90% ities to the public, the bank stated.
opinion on the European conti¬ multilateral trade, or in the much higher than prewar in physical
1:-The rise in the cost-of -living
nent is gravely preoccupied by, more obvious form of substantial
volume, the bank reported. Com¬
,and--of- other -commodity prices,
Every country has,
the prospects of that conference dollar loans.
pared with the 60% rise in real the bank
reported, is a reflection
and by the attitude of the Gov¬ of course, its price, and quite con¬
purchasing power of current in¬ of cost increases and of
shortages,
ceivably even the Eastern Eu¬
ernments concerned. '
comes, it would appear that pro¬
par'icularly of farm products a id
There can
be no
doubt that, ropean' countries will be prepared duction
was, tending to outrun the metals. Price distortions that now
generally; speaking,the
conti¬ to commit themselves to non-dis¬ market, but, the report states, "a
exist threaten the maintenance of
nental Governments are not en¬ crimination in return/for a suf¬
direct comparison between these
thusiastic
about
the
American ficiently large loan. They would
production and employment. In
figures is very superficial."
do so with the approval of the
policy aiming at the restoration
For one thing, consumers not such a situation a relatively few
Soviet Government,
approval
of multilateral international trade.
which
would
be
forthcoming, only buy the products of industry benefit, while many suffer, the
Strong opposition is likely tb be
since the Soviet Union would in¬ hut also the products of agricul- bank added. Thus the mass mar¬
forthcoming in; the first place
;ure and services, such as
doctors, kets for goods on which full pro¬
benefit by such loans.
from the countries east of the directly
Do¬
much
the / commitments, education or entertainment.
"Iron Curtain."
Under the in¬ How
mestic consumption of farm prod¬ duction depends are undermined.
fluence of the Soviet Union, they given in contradiction to funda¬
ucts in the aggregate, and of some
"Any action that will increase
have adopted a policy of State mental policies, will be worth in
distortions that now
controlled foreign trade, not as a the long run is another question. services, has not risen 60%, which the price
Western Europe, is ; likely to: gives leeway for greater increases
matter of temporary expediency
exist is harmful," the article con¬
consumption of products of
take its lead from Britain.
In in
but as a part of the fundamental
cluded. "Any action that will bring
economic system towards which spite of the weakening of Britain's industry J A second factor in the
financial and economic power as comparison is that not all of in¬ down the prices and costs that are
they are being steered. For them
dustrial production is in the form out of line is
helpful."
there can be no question of a re¬ a result of the war, the greater
of consumers' goods, a large frac¬
turn' to
laissez-faire in foreign part of the Continent still looks
tion consisting of capital goods
trade.
Their representatives are towards London for guidance in
matters relating to international purchased by business firms to
expected to hold out in favor of
quantitative
discrimination,
bi¬ trade or currency. The fact that maintain, improve or expand pro¬
duction and marketing facilities.
none of the continental countries
lateralism, and.regional pacts.
ratified the Bretton Woods Agree¬ At the present time, the bank
Nor
is
the
American
ment
until
Britain
decided
to reports, such spending by business
George B. Wallace & Co., 15
likely to receive much support
ferences
INDEX
purchasing
power only 60% above, maintenance of industrial production s
depends on combination of lower living costs through lower prices
and larger capital expenditures of business.
years
„
SWITZERLAND.—The coming Geneva Conference on
the two economic con¬
BASLE,
Sees Danger in Price Distortions
Nrothern Trust Company of Chicago points out that with industrial
European
countries to return to system of laissez-faire in foreign trade, and
predicts little support will be given American policy by Western
Europe at forthcoming International Trade Conference. Holds much
will depend on continuance of British leadership and loans from
of
Correspondent foresees great reluctance on part
0
Thursday, April 3, 1947
Old
Reorganization
Rails
•
.
'
._
'
''
•
v'•
,vs
'
J*'
Domestic & Foreign
Securities
New Issues
M. S.WlEN & Co.
ESTABLISHED ' 1919
Membert N. Y. Security Dealers Ass'n
40
Exchange PL N. Y. 5
HA. 2-8780
^t
"
Teletype N. Y. 1-1397
-
•
Excellent
Long-term
>.
/
,/V
Outlook
RALSTON STEEL CAR CO.
(freight
manufacturers)
car
Now Available
LERNER &
Investment
10 Post Office
CO.
Securities
Square, Boston 9. Mass.
Teletype Bs 69
Telephone Hubbard 1990
V
In Geo. B. Wallace Go.
is very
large.
state
not feel disposed to relinquish the
;
itself in Geneva.
Maintenance of industrial pro¬
duction at present levels depends
on
the combination of consumer
at their disposal for the
defense of their balance of pay¬
;
ratify it is well worth bearing in
mind, as history is likely to repeat
in the firm.
Yugoslavia Pays Its
purchases and capital expenditures
of business, the bank pointed out.
Government purchases of military
charge of the trading department.
that
their
Governments
do
weapons
ments.
They consider discrimina¬
tory trading methods as indispen¬
sable
as
exchange control. In order
to be able to
run
the risk of
World Bank Quota
Action
ex¬
to
posing themselves to the hazards
of multilateral
follows
Baranski's
Belgrade.
April
2
(Special to the "Chronicle") —
Following a visit of World Bank
Executive Director, Leon Barahski, to Belgrade, Yugoslavia re¬
cently paid its subscription to the
World Bank.
not
Even countries such
land
or
Sweden,
need
1
of
as
Switzer-
dollar
which
are
in
loans, would be
away with bilateral
a
a
with
the
York
G.
City,
Fuchs
partnership
Mr. Fuchs has
firm
for
some
been
time
in
148
Tel.
State St., Boston 9, Mass.
CAP. 0425
s
:
Teletype BS 259
'
Teletype—NY 1-971
Firm Trading Markets
CUBAN SECURITIES
Government
long while Yugoslavia, as
•-T
this country.
who represents
Baranski, a Pole
reluctant to do
Poland, Czecho¬
arrangements and discrimination slovakia and Yugoslavia in the
in general.
These arrangements Bank, is now enroute to Washing¬
have resulted in a kind of equi¬ ton.
V'" *
'
'
librium which is held to be parPrior
to
Baranski's visit, the
Yugoslav Government was 5 ob¬
tries.
Swiss economic literature durate. While the matter was still
in particular, stresses the extent in an
impasse, the United King¬
to which a small
country is ex¬ dom unblocked Yugoslavia's as¬
Specialize in all
Insurance
and
Bank
50 Broad Street
~
.
Issues
Utility Stocks and Bonds
TEXTILE
New York 4, N. Y.
Stocks
Issues
Investment Trust
Public
FOREIGN SECURITIES ;
fiBWUTTQT*!
'
^
Bank
in
We
Sugar
CIAM. MAMS & C.O■ INC.
paying its subscription to the
-until
the
United I States
should free Yugoslav gold frozen
Railroad
Industrial
matter of principle, insisted 011
!ticiUarly valuable by small coun¬
■
New
August
has been admitted to
HAnover 2-0050
WASHINGTON,
For
that
visit
sistance.'''■v;{•$'p%
-
Street,
announce
Ni Y. Telephone HAnover Z-7914
trade, they would
require large loans to provide
the means for meeting trade deficits.
The grand total of their
requirements would be an astro¬
nomic
figure, far
beyond
the
limits up to which
the United
States is likely to be prepared to
go in its policy of financial asall
William
f
s„
Up-to-date Circular
;
Aagasl Fucks Partner
from Western Europe.
Most lib¬
erated countries are in such a
-
Securities with
SECURITIES
a
New Eng. Market
AFFILIATE; CARL MARKS & CO. Inc. CHICAGO
Frederick C. Adams & Co.
Specialists in
New
A MARKET PLACE FOR LOW PRICED UNLISTED
SECURITIES
England
& Linn Coach & Truck
-
30 FEDERAL STREET, BOSTON 10
Established
Aberdeen Petroleum
-
Unlisted Securities
Tel.
in
HANcock 871S
1922
Teletype BS 22)
.
posed to shocks under
system of sets, whereupon the World Bank
free (or comparatively free) trade.
repeated its request to Belgrade,
Although the former neutrals are but without success until Mr.
in
a
a
Air
Cargo Transport
Aircraft & Diesel
Monroe Gasket
Equip.
.Myler Plastics
Ceraseal Chemical
Palmetex
Consolidated Industries
sufficiently strong financial Baranski's visit.
Corp.
*Seaboard Fruit Co., Inc.
Pressurelube
Cosmocolor
Princess
Differential Wheel
To
r
announce
the formation of
a
,
'
-
MUNICIPAL BOND DEPARTMENT
Red Bank Oil
Susquehanna Mills
;
Fleming Hall Tobacco
Harlow Aircraft
.
Kobbe & Company
.'••••
-
National
55 Liberty
at'
Associatidn
of
Securities
Dealers, -Inc.
- "
'
U. S. Airlines
} Morris Stein & Co.
50 BROAD
Teletype
"■
Trenton Valley Distillers
>
Street, New York 5, N. Y.
Telephone
**Hay 7-2663
-
INCORPORATED
-
Members
Trans-Carib Air Cargo
Keliett Aircraft
JOHN P. DOEHLING
NY
1-277
;
Empire Steel Corp. S'
Standard Silver & Lead
Gaspe Oil Ventures
•
General Products Corp.
Reiter Foster Oil
Electric Steam Sterilizing
under the management of
.
|
Duggan's Distilling
Vogue Shops
:
__
Established
ST., N. Y. 4
'
iTELETYPE—N.
1924
'
••
on
Request
Hill, Thompson & Co., Inc.;
Markets and Situations
-
HANOVER 2-2895
Y. 1-2866
*Prospectus
-
120
for Dealers
Broadway, New York 5
Tel. REctor 2-2020
Tele. NY
J
1-2660j
@FedFRASER